Standard cost : In the accounting records, the term standard cost refers to the practice of replacement of an expected cost for an actual cost. Then the difference between the expected costs, and actual costs showing the variance are also recorded periodically. A standard costs is also known as target cost or predetermined cost. Standard cost system: Standard cost system to the accounting systems which use standards for product cost. Standard cost system enables management to determine the following: How much a product should cost (standard costs). How much actually does it cost (actual cost). The standard cost per dining room table.

Question

Want to see the full answer?

Answer 1

Question

Chapter 8, Problem 2E

(a)

To determine

Standard cost:

In the accounting records, the term standard cost refers to the practice of replacement of an expected cost for an actual cost. Then the difference between the expected costs, and actual costs showing the variance are also recorded periodically. A standard costs is also known as target cost or predetermined cost.

Standard cost system:

Standard cost system to the accounting systems which use standards for product cost. Standard cost system enables management to determine the following:

How much a product should cost (standard costs).

How much actually does it cost (actual cost).

The standard cost per dining room table.

(b)

To determine

To explain: The reason behind the use of standard cost system by Company S.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Standard Product Cost Sana Rosa Furniture Company manufactures designer home furniture. Sana Rosa uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows: Direct labor: standard rate $24.00 per hr. standard time per unit 2.50 hrs. Direct materials (oak): standard price $8.00 per bd. ft. standard quantity 18 bd. ft. Variable factory overhead: standard rate $2.80 per direct labor hr. Fixed factory overhead: standard rate $0.80 per direct labor hr, a. Determine the standard cost per dining room table. If required, round your answer to two decimal places. per dining room table V. Using this principle, major b. A standard cost system provides Rosa Furniture management a cost control tool using the principle of management by exception cost deviations from standards can be investigated and corrected.

Standard Product Cost Designer Furniture Company manufactures designer home furniture. Designer Furniture uses a standard cost system. The direct labor, direct materials, and factory overhead standards for a finished dining room table are as follows: Direct labor: Direct materials (oak): Variable factory overhead: Fixed factory overhead: standard rate standard time per unit standard price standard quantity standard rate standard rate $17.00 per hr. 2.00 hrs. $8.50 per bd. ft. 17 bd. ft. $3.20 per direct labor hr. $1.20 per direct labor hr. a. Determine the standard cost per dining room table. Round to two decimal places. per table b. A standard cost system provides the company's management a cost control tool using the principle of management by exception ✓. Using this principle, major deviations from standards can be investigated and corrected. ✓ cost

Standard Product Cost Sana Rosa Furniture Company manufactures designer home furniture. Sana Rosa uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows: Direct labor: standard rate $19.00 per hr. standard time per unit 3.50 hrs. Direct materials (oak): standard price $8.50 per bd. ft. standard quantity 15 bd. ft. Variable factory overhead: standard rate $3.20 per direct labor hr. Fixed factory overhead: standard rate $1.20 per direct labor hr. a. Determine the standard cost per dining room table. If required, round your answer to two decimal places.$. per dining room table b. A standard cost system provides Rosa Furniture management a cost control tool using the principle of ??? Using this principle, ??? cost deviations from standards can be investigated and corrected.