**Standard Costing: Managerial Benefits**Standard costing helps managers do the following:1. Create new products2. Decrease accounting costs3. Develop more efficient production methods4. Identify performance standards5. Increase production levels6. Increase sales volume7. Prepare the master budget8. Set sales prices of products and services9. Set target levels of performance for flexible budgets **Quality, Inc. produced 1,000 units of the company’s product in 2018. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.25 per yard. The accounting records showed that 2,900 yards of cloth were used and the company paid $1.30 per yard. Standard time was two direct labor hours per unit at a standard rate of $10.50 per direct labor hour. Employees worked 1,500 hours and were paid $10.00 per hour.**Read the requirements.**Requirement 1.** What are the benefits of setting cost standards?Standard costing helps managers do the following:- [Dropdown for selection]- [Blank field for input]- [Blank field for input]- [Blank field for input]**Requirement 2.** Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances.Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). *(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity).***Tables:**1. **Direct materials cost variance** - **Formula:** [Dropdown for formula selection] - **Variance:** [Blank field for input]2. **Direct labor cost variance** - **Formula:** - **Variance:** [Blank field for input]Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). *(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity).*1. **Direct materials efficiency variance** - **Formula:** - **Variance:** [Blank field for input]2. **Direct labor efficiency variance** - **Formula:** - **Variance:** [Blank field for input]

Name: **Standard Costing: Managerial Benefits**Standard costing helps manag
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: **Standard Costing: Managerial Benefits**Standard costing helps managers do the following:1. Create new products2. Decrease accounting costs3. Develop more efficient production methods4. Identify performance standards5. Increase production levels6.