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26 Cards in this Set
- Front
- Back
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Management by exception
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A management system in which standards are set fir various activities with actual results compared ti these standards. Significant deviations from standards are flagged as exceptions.
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Standard Cost Card
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Shows the standard quantities and costs of the inputs required to produce a unit of a specific product.
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ideal Standards
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Standards that assume peak efficiency at all times
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Practical Standards
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standards that allow for normal machine downtime and other work interruptions can be attained through reasonable, though highly efficient, efforts by the average worker.
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Standard cost per unit
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the standard quantity allowed of an input per unit of a specific product, multiplied by the standard price of the input.
direct labor hours X $ per d-l hr. = $ per unit |
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Variances
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the difference between standard prices and actual prices and between standard quantities and actual quantities.
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Standard Price per unit
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The price that should be paid for a input. The price should be net of discounts and should include any shipping costs
Purchase Price + shipping - purchase discount = Standard price per unit |
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Standard Quantity per unit
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The amount of an input that should be required to complete to complete the period's actual output.
# lbs per unit X $ per lbs = $ per unit |
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Standard Rate per hour
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The labor rate that should be incurred per hour of labor time, including employment taxes and fringe benefits
Basic wage rate per hour + employment taxes + fringe benefits = standard rate per direct labor hour |
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Standard hours per unit
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the amount of direct labor time that should be required to complete a single unit of product, including allowances for breaks, machine downtime, cleanup, rejects and other normal inefficiencies.
# direct labor hour X $ per direct labor hour= $ per unit |
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Standard quantity allowed
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The amount of an input that should have been used to complete the periods actual output.
Actual # of unit X Standard Quantity per unit = Standard quantity allowed |
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standard hours allowed
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The time it should have taken to complete the period's output.
Actual # units produced X standard hours per unit = standard hours allowed |
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Materials Price Variance
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measures the difference between what is paid for a given quantity of materials and what should have been paid according to the standard.
Materials Price Variance= AQ(AP-SP) |
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Materials Quantity Variance
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measures the difference between the quantity of materials used in production and the quantity that should have been used according to the standard.
Materials Quantity Variance = SP(AQ-SQ) |
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Standard Quantity (SQ)
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# units X # lbs per unit = SQ
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Labor Rate Variance
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measures any deviation from standard in the average hourly rate paid to direct labor workers.
Labor Rate Variance= AH(AR-SR) |
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Labor efficiency Variance
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measures the productivity of direct labor.
Labor Efficiency variance = SR(AH-SH) |
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Standard Hours
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# units X # hrs. per unit= Standard hours (SR)
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Variable overhead spending variance
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The difference between the actual variable overhead cost incurred during a period and the standard cost that should have been incurred based on the actual activity of the period.
Variable Overhead Spending Variance = AH(AR-SR) |
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Actual Rate (AR)
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actual M.O. ÷ Direct labor hours = $ per hour.
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Variable Overhead Efficiency Variance
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Variable Overhead Efficiency Variance= SR(AH-SH)
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Standard Hours (SH)
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# units X # hrs. per unit = SH
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Balanced Score
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consists of an integrated set of performance measures that are derived from and support the company's strategy throughout the organization.
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Delivery cycle time
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the amount of time from when a customer order is received to when the completed order is shipped
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Throughput time
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The amount of time required to turn raw materials into completed priducts
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Manufacturing Cycle efficiency (MCE)
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MCE= Value-adding time (Process time) / Throughput (manufacturing cycle) time
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