A Standard Cost System Is One

question 43

Multiple Choice

A standard cost system is one:

• A)that provides a separate record of cost for each special-order product.
• B)that uses predetermined costs to furnish a measurement that helps management make decisions regarding the efficiency of operations.
• C)that accumulates costs for each department or process in the factory.
• D)where costs are accumulated on a job cost sheet.

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Definitions:

Labor Rate Variance

This measures the difference between the actual wages paid to workers and the expected wages as per standard cost for the actual labor hours worked.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected overhead based on standard costs.

November

The eleventh month of the Gregorian calendar, following October and preceding December.

Variable Overhead Efficiency Variance

The difference between the expected and actual variable overhead costs, based on the efficient use of production resources.