At a recent seminar you attended, the invited speaker was discussing some of the advantages and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
At a recent seminar you attended, the invited speaker was discussing some of the advantages and disadvantages of standard costs in terms of evaluating performance and motivating goal-congruent behavior on the part of employees. One criticism of standard costs in particular caught your attention: The use of conventional standard costs may not provide appropriate incentives for improvements needed to compete effectively with world-class organizations. The speaker then discussed so-called continuous-improvement standard costs. Such standards embody systematically lower costs over time. For example, on a monthly basis, it might be appropriate to budget a 1.0% reduction in per-unit direct labor cost. Assume that the standard wage rate into the foreseeable future is $22 per hour. Assume, too, that the budgeted labor-hour standard for October of the current year is 2.70 hours and that this standard is reduced each month by 1%. During December of the current year the company produced 7,200 units of XL-10, using 21,000 direct labor hours. The actual wage rate per hour in December was $24.00. Required: 1. Prepare a table that contains the standard labor-hour requirement per unit and standard direct labor cost per unit for the 4 months, October through January. 2. Compute the direct labor efficiency variance for December. Was this variance favorable or unfavorable? At a recent seminar you attended, the invited speaker was discussing some of the advantages and disadvantages of standard costs in terms of evaluating performance and motivating goal-congruent behavior on the part of employees. One criticism of standard costs in particular caught your attention: The use of conventional standard costs may not provide appropriate incentives for improvements needed to compete effectively with world-class organizations. The speaker then discussed so-called continuous-improvement standard costs. Such standards embody systematically lower costs over time. For example, on a monthly basis, it might be appropriate to budget a 1.0% reduction in per-unit direct labor cost. Assume that the standard wage rate into the foreseeable future is $22 per hour. Assume, too, that the budgeted labor-hour standard for October of the current year is 2.70 hours and that this standard is reduced each month by 1%. During December of the current year the company produced 7,200 units of XL-10, using 21,000 direct labor hours. The actual wage rate per hour in December was $24.00. Required: 1. Prepare a table that contains the standard labor-hour requirement per unit and standard direct labor cost per unit for the 4 months, October through January. 2. Compute the direct labor efficiency variance for December. Was this variance favorable or unfavorable?
Expert Answer:
Answer rating: 100% (QA)
1 Table of Standard LaborHour Requirement and Direct Labor Cost per Unit Month Oct Nov Dec Jan Stand... View the full answer
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
At a recent seminar you attended, the invited speaker was discussing some of the advantages and disadvantages of standard costs in terms of evaluating performance and motivating goal-congruent...
-
The Hampshire Company manufactures umbrellas that sell for $12.50 each. In 2014, the company made and sold 60,000 umbrellas. The company had fixed manufacturing costs of $216,000. It also had fixed...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Draw a graph showing the marginal revenue (MR) and marginal cost (MC) of increasing the tax rate (t) in the Peltzman model of regulation represented by equation (19.1). Place the tax rate on the...
-
Terms of a lease agreement and related facts were: a. Costs of negotiating and consummating the completed lease transaction incurred by the lessor were $4,242. b. The retail cash selling price of the...
-
Recall the data set of soil compressibility measurements given in DS 6.6.6. Construct the empirical cumulative distribution function for this data set. Use the sign test and the signed rank test to...
-
Go to PWC.com and select "Services" and then "Data and Analytics" (under "Consulting"). Choose a topic and write about how PWC is using data analytics and/or artificial intelligence to help its...
-
Wallis Car Wash, Inc., expected to wash 2,000 cars during the month of August. Washing each car was expected to require 0.2 hours of labor. The company actually used 420 hours of labor to wash 1,880...
-
#39 The risk-free rate is 1.27% and the market risk premium is 7.30%. A stock with a of 0.91 will have an expected return of ____%. Answer format: Percentage Round to: 2 decimal places (Example:...
-
3.95 Copper tubing is joined to a solar collector plate of thickness t, and the working fluid maintains the tem- perature of the plate above the tubes at T There is a uniform net radiation heat flux...
-
Fishes coming under the class chondrichthyes have to swim continuously. Why?
-
The International Space Station is in orbit around Earth at a distance r from the center of the Earth. A chunk of space debris hits the Earth by 12%. Did Earth's gravitational force on the Station...
-
Your accounting firm is a medium-sized, national CPA firm with over 6,000 professionals. It is mid-January 2021, and you have been promoted to audit manager of the Pacific Northwest office. Your...
-
A study found that a student's GPA, g, is related to the number of hours worked each week, h, by the equation g = -0.0007h2 +0.015h+3.06. Estimate the number of hours worked each week for a student...
-
Three different forces are applied to an object, one after the other. The corresponding displacements are shown in Table 4.2. a) Calculate the work done by each force and the total work. b) Draw a...
-
In her single-person scull, Maja can maintain a speed of 4.7 mph in still water. If she is paddling into a 2.2-mph current, how long will it take her to complete the 7-mi route?
-
In the context of nursing emergency care, consider a scenario where a patient presents with severe shortness of breath and chest pain. Formulate a question that addresses the critical aspects of...
-
Repeat Exercise 16.6 using the t-test of the coefficient of correlation. Is this result identical to the one you produced in Exercise 16.6?
-
What are some important behavioral and implementation issues in strategic performance measurement? How does the management accountant deal with these issues?
-
The company for which you work recently implemented time-driven activity-based costing (TDABC) in conjunction with its ERP system. Management is pleased with the revised product and customer cost...
-
Use the data in Problem 17-67 and a spreadsheet to complete this problem. Use the spreadsheet functions to carry out all calculations. Do not hard-code or carry out calculations elsewhere and type in...
-
A Nash equilibrium is _________ because once it is established, neither firm has an incentive to change behavior.
-
Repeated games are _________ likely to lead to cooperative results than one-shot games.
-
In a(n) _________ strategy, a game participant does whatever the other participant did during the previous play.
Study smarter with the SolutionInn App