Standard Costing and Variance Analysis at Tesla

Requirements:

1. Develop standard costs for Tesla's electric vehicles, incorporating direct materials, direct labor, and variable overhead costs.

Cost Element	Model 3 ($)	Model Y ($)
Direct Materials	28,000	30,000
Direct Labor	10,000	12,000
Variable Overhead	5,000	6,000

2. Calculate the labor and materials price and efficiency variances for both models based on actual and standard costs.

Product	Labor Variance ($)	Materials Variance ($)
Model 3	3,000 favorable	2,000 unfavorable
Model Y	4,000 favorable	3,000 favorable

3. Perform a comprehensive performance evaluation by comparing actual costs against standard costs for production volumes.
4. Recommend operational improvements and cost control measures based on the variance analysis to enhance profitability.