Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At a tecent seminat you attended, the invited speaket was discussing some of the advantages and disadvantages of standard costs in terms of evaluating performance

image text in transcribed
At a tecent seminat you attended, the invited speaket was discussing some of the advantages and disadvantages of standard costs in terms of evaluating performance and motivating goal-congruent behaviof on the part of employees One ctiticism of standard costs in particulat 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 speaket then discussed so-called continuousimprovement Standard costs Such standards embody systematically lower costs over time For example, on a monthly basis, it might be appropriate to budget a 105 teduction in pet-unit direct labor cost. Assume that the standard wage rate into the foreseeable future is $29 per hour. Assume, too, that the budgeted labor-hour standard for October of the current year is 3.40 hours and that this standard is reduced each month by 2%. During December of the current year the company produced 5,800 units of XL10, using 24,500 direct labor hours. The actual wage rate per hour in December was $31.00 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, Otrober through January 2. Compute the direct labor efficiency vatiance for December. Was this vatiance favorable or unfavorable? Complete this question by entering your answers in the tabs below. Prepare a table that contains the standard labor-hour requirement per unit and standard direct labor cost per unit for the 4 month5, October through January. (Do not round intermediate calculations. Round your "Standard Oirect Labor Cost/unit") answers to 2 decimal places and "Standard Labor-Hour Requirement/Unit" answers to 5 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, J. Mather

8th Edition

0470929383, 978-0470929384

More Books

Students also viewed these Accounting questions