Are the normal or expected hours for billing each month higher or lower than the actual hours billed last month? Were the actual expenditures of office supplies, equipment, indirect labor, and so on, higher or lower than expected?
__________________________________________ Normal or Expected_____________
______________________________________________ Standards _____Ideal Standards
Direct materials quantity per unit . . . . . . . . . . . . . . . 4 lbs. per unit . . . . . . 3 lbs. per unit
Direct materials price per pound . . . . . . . . . . . . . . . $12 per lb. . . . . . . . . . . . $10 per lb.
Direct labor hours per unit . . . . . . . . . . . . . . . . . . . . 5 hours per unit . . . 6 hours per unit
Direct labor rate per hour . . . . . . . . . . . . . . . . . . . . $18 per hour . . . . . . . . $15 per hour
Compute the standard cost per finished unit for the normal or expected standards and for the ideal standards. Explain how both normal and ideal standards would be used by managers?