Final answer:
A standard cost sheet includes standard costs such as direct material, direct labor, and overhead rates, not actual costs or tax rates. The correct answer to the question is c. Standard price of direct labor. 'Spreading the overhead' pertains to diminishing average fixed costs per unit as production quantity increases.
Step-by-step explanation:
Understanding a Standard Cost Sheet
In accounting and cost management, a standard cost sheet is a detailed statement of the expected or standard costs for products or services, produced by a company. This sheet is instrumental for budgeting and provides a benchmark for the measurement of performance and cost control. The standard cost sheet typically includes the expected costs of direct material, direct labor, and overhead, not actual costs or tax rates. Therefore, the correct answer to the question is c. Standard price of direct labor. Standard costs are predetermined costs and include standard prices for direct materials and labor, and standard rates for overhead.
When discussing the concept of 'spreading the overhead', this refers to the allocation of fixed overhead costs (like rent, salaries, or equipment depreciation) over the total output produced. Since these costs are fixed, the more units produced, the lower the average fixed cost per unit will be. In theory, the average fixed cost curve is a hyperbolic shape, declining continuously as output increases. 'Spreading the overhead' means that each additional unit of output bears a smaller portion of the fixed cost, making large-scale production potentially more cost-efficient.