+
Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
|
How are standards set and what is their purpose?
|
Standards are used to measure performance of an organization. Quantity and price standards are set for each major input of raw materials.
|
|
When managers focus their attention on results that deviate from expectations
|
Management by exception
|
|
What are ideal standards vs. practical standards?
|
Ideal standards assume perfection and do not allow any inefficiency. Practical standards can be attained by employees working at a reasonable, though efficient pace and allow for normal breaks and work interruptions
|
|
Which type of standard is most useful for measuring controllable production inefficiencies?
|
Practical standards
|
|
What is computed first for direct material variances?
|
Actual quantity of input, at actual price (AQ x AP)
|
|
What is computed second for direct material variances?
|
Actual quantity of input, at standard price (AQ x SP)
|
|
What is computed third for direct material variances?
|
Standard quantity allowed, at standard price (SQ x SP)
|
|
What might be the causes of favorable direct materials and direct labor variances?
|
If the actual quantity is less than the standard quantity
|
|
What might be the causes of unfavorable direct materials and direct labor variances?
|
If more material was actually used than the standard allows
|
|
The amount of time required to turn raw materials into completed products
|
Throughput time
|
|
How is throughput time calculated?
|
Process + inspection + move + queue
|
|
The amount of time from when a customer order is received to when to completed order is shipped
|
Delivery cycle time
|
|
How is MCE calculated?
|
Process time / Throughput time
|
|
How is target cost determined?
|
Target price - Profit margin
|
