Chris Maynard, one of Heath Metal Productss three customer engineers, is reviewing the costs of the radar
Question:
Chris Maynard, one of Heath Metal Products’s three customer engineers, is reviewing the costs of the radar housings for Lingle Aerospace (LA). LA is one of Maynard’s largest accounts and the radar housing is a fabricated piece of sheet metal LA uses to assemble an aircraft’s radar system installed in the nose of the plane. In reviewing the detailed cost record for this job, Maynard is concerned that the direct labor posted to the job appears too high. He estimated the direct labor in the welding department to be six hours per batch of 130 units. But the job sheet reports that 9.5 hours were used.
Required:
a. Identify various problems at Heath.
b. What improvements would you suggest Heath implement?
Step by Step Answer:
a Problems at Heath At the heart of all cost systems is the accurate recording of direct costs including direct labor hours to jobs Heath has a problem of inaccurate product costs After a job is compl...View the full answer
Accounting for Decision Making and Control
ISBN: 978-0078025747
8th edition
Authors: Jerold Zimmerman
