Ch. 9 Standard Costs Quiz

What are standard costs based on?

• Random estimates

• Carefully predetermined amounts

• Historical data

• Market trends

What is one of the purposes of standard costs?

• To increase production speed

• To serve as benchmarks for measuring performance

• To reduce labor costs

• To eliminate overhead

How are standard costs used in planning?

• For planning marketing strategies

• For planning labor, material, and overhead requirements

• For planning product design

• For planning customer service

What do standard costs represent in terms of performance?

• The minimum level of performance

• The expected level of performance

• The maximum level of performance

• The average level of performance

What do ideal standards represent?

• Efficient levels of performance under regular conditions.

• Optimum levels of performance under perfect conditions.

• Minimum levels of performance under any conditions.

• Average levels of performance under normal conditions.

What do normal standards represent?

• Optimum levels of performance under perfect conditions.

• Efficient levels of performance expected under regular conditions.

• Minimum levels of performance under any conditions.

• Average levels of performance under ideal conditions.

How should properly set normal standards be described?

• Easy and unattainable.

• Rigorous but unattainable.

• Rigorous but attainable.

• Simple and achievable.

What is a quantity standard?

• The amount of input that should be used in each unit of product or service

• The price that should be paid for a specific quantity of input

• The quality of the final product

• The time taken to produce a unit

Which of the following is an example of a price standard?

• Number of ounces of aluminum in a Coca Cola can

• Price per ounce of aluminum

• Number of tons of steel in a Ford F-150 truck

• Number of yards of denim in a pair of Levi's 550 jeans

What does a price standard specify?

• The amount of input used

• The price that should be paid for a specific quantity of input

• The quality of the input

• The time required to produce a unit