The following details show the direct labour requirements for the first six batches of a new product
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The following details show the direct labour requirements for the first six batches of a new product that were manufactured last month:
The Management Accountant reported the following variances:
The Production Manager has now said that he forgot to inform the Management Accountant that he expected a 90 per cent learning curve to apply for at least the first 10 batches.
Required:
(a) Calculate planning and operational variances that analyze the actual performance taking account of the anticipated learning effect.
The learning index for a 90 per cent learning curve is –0.1520.
(b) Explain the differences between standard costing and target costing.
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