Question
Hey guys can you help me to respond post discusstion please The first person: DQ 21-13 Text Page 967 - What are the relations among
Answer:
The standard cost is established by using past experiences to measure the actual cost, it can be used in a flexible budgeting system to enable management to better understand the reasons for variances. Variance analysis summarizes the difference between standard cost and the actual cost, and management by exception means managers focus attention on the difference between actual cost and standard cost. All of the above methods are used for a better understanding of the manufacturing process.
The second person: DQ 17-7 Text Page 787 - Explain why a single plant-wide overhead rate can distort the cost of a particular product.
A single plantwide overhead rate may be misleading when allocating overhead costs to a particular product. The amount of overhead incurred by each department may, and probably will, differ from other departments. For example, say a company has 2 Departments. Department 1 and department 2. Department 1 makes product A and department 2 makes product B. If department 1 uses 70% of the total overhead and the total overhead is allocated evenly between the two departments, then product B will seem more expensive to produce Then it actually is.
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