The Standard Cost of Inputs Is Determined by Multiplying the Actual

question 186

True/False

The standard cost of inputs is determined by multiplying the actual price by the standard quantity allowed for the output achieved.

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Definitions:

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under current or anticipated conditions.

Standard Hours

The set number of hours that is expected to be used to complete a certain task or job in a manufacturing or project setting.

Actual Hours

The real number of hours worked or spent on a specific task or project, as opposed to planned or estimated hours.

Direct Labour Rate Variance

The difference between the actual wages paid to workers and the standard cost of those wages for the actual hours worked.