Page 375 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 375
Standard costing
Test your understanding 2
X, Y and Z are manufacturing companies and all use standard costing.
X has set a standard cost which allows for 90% efficiency. This allows for
machine downtime and the level of wastage normally experienced during
production.
Y’s standards were set several years ago. The managers of Y find it useful to
compare current performance against these standards to measure the
improvements which have been made.
Z has set standards which assume 100% efficiency will be achieved and no
losses will be incurred during production.
Match each of the companies to the types of standard they are using:
Standard Company
Ideal X
Basic Y
Attainable Z
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