Question

The standard labor rate is: -the amount of time that workers should take to produce a...

The standard labor rate is:

-the amount of time that workers should take to produce a single unit of product.

-the expected hourly cost of labor, excluding employee taxes and benefits.

-the amount of time that workers should take to produce a single unit of product times the expected hourly cost of labor.

-the expected hour cost of labor, including employee taxes and benefits.

When completing a variance analysis, we describe variances as (       ) or (      )

-good;bad.

-Favorable; unfavorable

-ideal; less than ideal

-positive; negative

How do managers and companies set price and quantity standards?

-based on the ideal budget created for the operating division.

-based on prior period variances.

-based on historical data, industry averages, and the results of process studies.

-based on manager’s previous experience at another company.

Creating a budget is an important part of which phase of the planning and control process?

-implementing

-controlling

-executing

-planning

Business   Accounting   
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Answer #1

Ques 1) Option D, the expected hour cost of labor, including employee taxes and benefits.

Ques 2) Option B, Favorable; unfavorable.  A variance is usually considered favorable if it improves net income and unfavorable if it decreases income.

Ques 3) Option C, Based on historical data, industry averages, and the results of process studies. Others are just irrelevant when setting standard price and standard quantity. Standard cost and price are part of budget, note from where we decide standards.

Ques 4) Option D, Planning. Once your business is operational, it's essential to plan and tightly manage its financial performance. Creating a budgeting process is the most effective way to keep your business - and its finances - on track.

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