Reaction to unfavorable price variance and efficiency variance for manufacturing overhead: Unfortunately the price and efficiency variance were both unfavorable for CBI.…
The overall efficiency variance was unfavorable. This is largely due to the large amount of direct materials used inefficiently. Although the direct labor and advertising costs were favorable; it was not enough to counter the difference between the amount that was budgeted and the actual amount used for direct materials. In order to correct the overall efficiency variance, CBI can purchase high-quality materials which would result in fewer defective products and more efficient use of…
In the field of accounting, activity-based costing and traditional costing are two different methods for allocating overhead costs to products. In traditional costing systems, all manufacturing costs are assigned to products whether or not they are caused by the products. Furthermore, nonmanufacturing costs are not assigned to products, even those nonmanufacturing costs that are caused by the products. On the other hand, in activity based costing, nonmanufacturing costs as well as manufacturing costs may be assigned to products. Another difference is that in traditional costing the entire factory may have only one overhead cost pool and one measure of activity such as direct labor hours, while activity based costing has a number of overhead cost pools, each of…
What is your assessment of Nardelli’s changes at Home Depot? Which of the changes had the greatest impact?…
In this document ACC 561 Assignment Week 4 Costing Methods Paper there is a review of the following parts: Strategy ABC Installation Cost System Conclusion…
Plant. They have been losing money for years and they are unable to identify the reason.…
through value and competitive cost. We realized that not every person would need an extremely…
1. Is the company correct in its practice of not manufacturing standard model compressors on Sundays because of the accounting loss incurred on each unit?…
First of all what is the definition of cost efficiency and quality or improvement quality?…
From Exhibit 2 we can see that only "Power" and "Operations: hourly personnel" are variable costs that have relation to…
Adopting a standard costing system helps identify performance standards and also helps a company’s managers in preparing budgets and setting performance target levels. In this case, the company needed to find out if the new material it was using was providing any benefits. These favorable variances indicate that the quality of this new material did not have any detrimental effects on production…
Despite the favorable sale variance that the company records, it is only the Leather Jacket that records favorable variance because the budgeted sale volume is 5,000 units and the actual sale volume is 16,500 units making the company to record a favorable variance of 11,500 in the sale volume. However, the variance for…
2. What is the total cost? How much of the total cost are labor costs? Capital costs?…
During the initial 6 years of we were more focussed on bringing the cost of the product low. We did this by sacrificing our miscellaneous expenses. We maintained the quality of materials at 50% but cut down on investment on TQM and styling/features. This indeed did impact our product image but yet we were able to get around 15% market share in the wholesale market.…