A standard cost card is usually prepared for each product manufactured. Which statement best describes its content?

A standard cost card is usually prepared for each product manufactured. Which statement best describes its content?

• A. A document showing expected unit costs for all inputs for a product
• B. A list of suppliers
• C. A forecast of demand
• D. A schedule of maintenance

Answer: (D)

The key idea is that a standard cost card sets the expected cost per unit for every input used to make a product. It lists standard costs for materials, labour, and overhead, showing the total standard cost to produce one unit. This lets you compare actual costs to what was planned and identify variances that need investigation. The card is not about who supplies the inputs, nor about forecasting demand, nor about maintenance planning—those are separate tasks. For example, if one unit consumes 2 metres of material at $3 each, 0.5 hours of labour at $12/hour, and overhead of $4, the standard cost per unit would be 2×3 + 0.5×12 + 4 = 16.

The key idea is that a standard cost card sets the expected cost per unit for every input used to make a product. It lists standard costs for materials, labour, and overhead, showing the total standard cost to produce one unit. This lets you compare actual costs to what was planned and identify variances that need investigation. The card is not about who supplies the inputs, nor about forecasting demand, nor about maintenance planning—those are separate tasks.

For example, if one unit consumes 2 metres of material at $3 each, 0.5 hours of labour at $12/hour, and overhead of $4, the standard cost per unit would be 2×3 + 0.5×12 + 4 = 16.