Standard Costing at Webb Company
Webb uses standard costing. The development of standards for Webb’s direct manufacturing
costs was described in Chapter 7. This chapter discusses the development of standards
for Webb’s manufacturing overhead costs. Standard costing is a costing system
that (a) traces direct costs to output produced by multiplying the standard prices or rates
by the standard quantities of inputs allowed for actual outputs produced and (b) allocates
overhead costs on the basis of the standard overhead-cost rates times