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short essay style questions for Managerial Accounting . short on time. all the info attached below
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Explanation & Answer
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Short essay questions for final
1.(a) What is a standard cost (5 points)? (b) Provide an example of a manufacturing
standard cost (5 points). (c) What is an ideal standard (5 points)? (d) What is a practical
standard (5 points)? (e) Should ideal or practical standards be used (5 points)?
a. A standard cost can probably be best described as cost that is related to the
manufacturing process and is determined to be a budgeted or planned
cost. Standard costs are used as target costs and are usually developed from
historical data analysis.
b. Manufacturing costs are all costs associated with converting the materials
into the actual product and they are typically divided into three categories: direct
materials, direct labor & manufacturing overhead. So an example of a
manufacturing standard cost would be the cost of wood if you are making a
table or something like that.
c. Ideal standards are standards that are based on perfect or ideal conditions,
that do not allow for any waste in the production process, machine breakdown,
or other inefficiencies.
d. Practical standards are the standards that can be achieved by the average
worker.
e. Yes, they both set the standard and every employee should try to meet them.
If you don't set standards then your goals wouldn't be attainable.
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