Define the following terms: standard cost system, total variance, material price variance, and labor efficiency variance
A standard cost system records both standard costs and actual costs in the accounting records. This process allows for better cost control because actual costs can be easily compared to standard costs.
A total variance is the difference between actual input cost for material or labor and the standard cost for material or labor for the output produced.
The material price variance is the difference between the actual price paid for material and the standard price of the material times the actual quantity used or purchased.
The labor efficiency variance compares the number of hours actually worked with the standard hours allowed for the production achieved and values this difference at the standard labor rate.
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Authorized stock represents the
a. maximum number of shares that can be issued. b. number of shares that have been sold. c. number of shares that are currently held by stockholders. d. number of shares that have been repurchased by the corporation.
Trend analysis is analysis
a. of dollar changes and percentage changes over several years. b. in which all items are presented as a percentage of one selected item on a financial statement. c. in which a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. d. of all ratios that increased or decreased over past accounting periods.
In a SMART sales call objective, the "M" refers to the fact that the objective should:
A. maximize the customer's order size. B. manage time wisely. C. move the prospect to buy. D. be measurable. E. minimize the cost to the customer.
The margin of safety is:
a. the amount by which sales can be decreased before losses occur. b. the amount by which sales should be increased before generating profit. c. the difference between sales and the target profit. d. the same as gross margin. e. None of the answers are correct.