Discuss the difference between budgets and standard costs

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Reference no: EM13939765

1. Discuss the difference between budgets and standard costs.

2. Describe the relationship that unit standards have with flexible budgeting.

3. Why is historical experience often a poor basis for establishing standards?

4. What are ideal standards? Currently attainable standards? Of the two, which is usually adopted? Why?

5. Explain why standard costing systems are adopted.

6. How does standard costing improve the control function?

7. Discuss the differences among actual costing, normal costing, and standard costing.

8. What is the purpose of a standard cost sheet?

9. The budget variance for variable production costs is broken down into quantity and price variances. Explain why the quantity variance is more useful for control purposes than the price variance.

10. When should a standard cost variance be investigated?

11. What are control limits, and how are they set?

12. Explain why the materials price variance is often computed at the point of purchase rather than at the point of issuance.

13. The materials usage variance is always the responsibility of the production supervi- sor. Do you agree or disagree? Why?

14. The labor rate variance is never controllable. Do you agree or disagree? Why?

15. Suggest some possible causes of an unfavorable labor efficiency variance.

16. What is kaizen costing? On which part of the value chain does kaizen costing focus?

17. What is target costing? Describe how costs are reduced so that the target cost can be met.

Reference no: EM13939765

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