Question: 1. What is a cost variance?
2. BatPro makes metal baseball bats. Each bat requires 1 kg. of aluminum at $20 per kg. and 0.50 direct labor hours at $16 per hour. Overhead is assigned at the rate of $40 per labor hour. What amounts would appear on a standard cost card for BatPro?
3. Managers use management by exception for control purposes.
(1) Describe the concept of management by exception.
(2) Explain how standard costs help managers apply this concept to monitor and control costs.