AccountingPrinciplesStandardCostsandBalancedScorecard幻灯片.pptxVIP

;Learning Objectives;Both standards and budgets are predetermined costs, and both contribute to management planning and control. There is a difference: A standard is a unit amount. A budget is a total amount.;Illustration 25-1;Setting standard costs requires input from all persons who have responsibility for costs and quantities. Standards should change whenever managers determine that the existing standard is not a good measure of performance.;IDEAL VERSUS NORMAL STANDARDS;Most companies that use standards set them at a(n): optimum level. ideal level. normal level. practical level.;How Do Standards Help a Business? A number of organizations, including corporations, consultants, and governmental agencies, share information regarding performance standards in an effort to create a standard set of measures for thousands of business processes. The group, referred to as the Open Standards Benchmarking Collaborative, includes IBM, Procter and Gamble, the U.S. Navy, and the World Bank. Companies that are interested in participating can go to the group’s website and enter their information. Source: Becky Partida, “Benchmark Your Manufacturing Performance,” Control Engineering (February 4, 2013).;A CASE STUDY;The direct materials price standard is the cost per unit of direct materials that should be incurred.;The direct labor quantity standard is the time that should be required to make one unit of the product.;MANUFACTURING OVERHEAD;The company expects to produce 13,200 gallons during the year at normal capacity. It takes 2 direct labor hours for each gallon.;The total standard cost per unit is the sum of the standard costs of direct materials, direct labor, and manufacturing overhead. ;Ridette Inc. accumulated the following standard cost data concerning product Cty31. Materials per unit: 1.5 pounds at $4 per pound. Labor per unit: 0.25 hours at $13 per hour. Manufacturing overhead: Predetermined rate is 120% of direct labor cost. Compute the standard cost o