Checking to see if my highlighted answers are correct????

__d__ 1. What is a standard cost?

a. The total number of units times the budgeted amount expected

b. Any amount that appears on a budget

c. The total amount that appears on the budget for product costs

d. The amount management thinks should be incurred to produce a good or service

__c__ 2. A standard cost is

a. a cost which is paid for a group of similar products.

b. the average cost in an industry.

c. a predetermined cost.

d. the historical cost of producing a product last year.

__c__ 3. The difference between a budget and a standard is that

a. a budget expresses what costs were, while a standard expresses what costs should be.

b. a budget expresses management's plans, while a standard reflects what actually happened.

c. a budget expresses a total amount, while a standard expresses a unit amount.

d. standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system.

PART II Direct Labor Standard (20 points)

Engines Done Right Co. is trying to establish the standard labor cost of a typical engine tune-up. The following data have been collected from time and motion studies conducted over the past month.

Actual time spent on the tune-up 1.0 hour

Hourly wage rate $16

Payroll taxes 10% of wage rate

Setup and downtime 10% of actual labor time

Cleanup and rest periods 20% of actual labor time

Fringe benefits 25% of wage rate

Instructions

(a) Determine the standard direct labor hours per tune-up

standard direct labor hours per tune-up = Actual time spent + Setup and downtime + Cleanup and rest periods

standard direct labor hours per tune-up = 1 + 1*10% + 1*20%

standard direct labor hours per tune-up = 1.3 Hours

(b) Determine the standard direct labor hourly rate.

standard direct labor hourly rate = Hourly wage rate + Payroll taxes + Fringe benefits

standard direct labor hourly rate = 16 + 10%*16 + 25%*16

standard direct labor hourly rate = 21.60

(c) Determine the standard direct labor cost per tune-up.

standard direct labor cost per tune-up = standard direct labor hours per tune-up*standard direct labor hourly rate

standard direct labor cost per tune-up = 1.3*21.6

standard direct labor cost per tune-up = $ 28.08

(d) If a tune-up took 1.5 hours at the standard hourly rate, what was the direct labor quantity variance?

Direct labor quantity variance = (Actual Hour - Standard Hour) * Standard Rate

Direct labor quantity variance = (1.50 - 1.30)*21.60

Direct labor quantity variance = $ 4.32 Unfavorable