Reference no: EM131460250
Assignment: Calculating Variances and Analyzing the Results
While many organizational costs can be planned for, the actual results may vary from the initial projections. Assessing how these variances impact the bottom line is an essential task of many managers. For this Assignment, review the Learning Resources for this week and consider how they might apply to the scenario presented. Consider how variance analysis and the results obtained from conducting such an analysis might impact decision making.
Spine Line is a manufacturer of high-quality products designed to help support healthy spines. Their newest product offering is a massage chart. Below is the standard cost structure for the chair:
Standard Cost Sheet: Massage Chair
Metal tubing 6 meters @ $3 $18.00
Leather 2 square meters @ $7 $14.00
Padding 3 kilograms @$4 $12.00
Direct labor 4 hours @ $15 $60.00
Total standard cost $104.00
This month, Spine Line manufactured 500 massage chairs. The following costs were incurred:
Actual Costs Incurred for the Month: Massage Chair
Metal tubing 3,100 meters $9,455
Leather 1,100 square meters $7,722
Padding 1,600 kilograms $6,560
Direct Labor 1,800 hours $27,270
Total cost $51,007
Adapted from: Zimmerman, J. L. (2014). Accounting for decision making and control (8th ed.). New York: NY: McGraw-Hill, "Healing Touch", p. 565.
Suppose you are the senior controller for Spine Line and you plan to perform a variance analysis of the massage chairs manufactured to determine if the standards are being met. Once you have completed the analysis, you plan to show it to the production department manager and ask for an explanation of any variances that you believe should be examined.
The Assignment:
Part 1: Calculate all materials and labor variances in a spreadsheet by using a program like Excel. Be sure to include price, quantity, wage rate, and labor efficiency variances.
Part 2: Prepare a memo to your subordinate, using a program like Word
Summarize and analyze the actual costs in relation to the standard costs incurred for the month.
Ask for clarification of any variances that need to be investigated.
Be sure to include whether alternatives exist for the future of the organization and explain how the results of the variance analysis might influence those alternatives.
|
Period that government-paid interest runs
: a. If Luis claim for a refund is correct in amount, how much tax will he recover? b. What is the period that government-paid interest runs with respect to Luis
|
|
Find probability that she had taken public transportation
: According to a recent survey by two United Nations agencies and a nongovernmental organization, two in every three women in the Indian capital of New Delhi.
|
|
What value of the investor''s position
: The one month interest rate is 6%. What's value of the investor's position?
|
|
What is the probability that the worker is college educated
: ince the fall of 2008, millions of Americans have lost jobs due to the economic meltdown. A recent study shows that unemployment has not impacted white collar.
|
|
Calculate all materials and labor variances in a spreadsheet
: Calculate all materials and labor variances in a spreadsheet by using a program like Excel. Be sure to include price, wage rate, and labor efficiency variances.
|
|
What is the maximum price
: If you require an 11.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
|
|
What percent of the homes in the us were foreclosed
: A recent study challenges the media narrative that foreclosures are dangerously widespread (N e w York Times, March 2 , 2009).
|
|
Five years of on ordinary annuity cash flow
: What is the future value in five years of on ordinary annuity cash flow of $2134 every quarter of the year at the end of the period, add on annual interest rate
|
|
What is the probability that a patient did not have surgery
: According to results from the Spine Patient Outcomes Research Trial, or SPORT, surgery for a painful, common back condition resulted in significantly reduced.
|