Why a standard cost system may negatively impact

Assignment Help Cost Accounting
Reference no: EM13903365

Behavioral impact of implementing standard cost system (adapted from CMA exam). Windsor Healthcare, Inc., a manufacturer of custom-designed home health-care equipment, has been in business for 15 years. Last year, in an effort to better control the costs of their products, the controller implemented a standard cost system. Reports are issued monthly for tracking performance, and any negative variances are further investigated.
The production manager complained that the standards are unrealistic, stifle motivation by concentrating only on negative variances, and are out of date too quickly. He noted that his recent switch to titanium for the wheelchairs has resulted in higher material costs but decreased labor time. The net result was no increase in the total cost of producing the wheelchair. The monthly reports continue to show a negative material variance and a positive labor variance, despite the fact that there are indications that the workers are slowing down.

a. Describe several ways that a standard cost system strengthens management cost control.

b. Describe at least two reasons why a standard cost system may negatively impact the motivation of production employees.

Reference no: EM13903365

Questions Cloud

Construct the payoff matrix : Construct the payoff matrix. What is the non-cooperative (Nash) equilibrium for this game? Explain how you have arrived at this answer.
Describe how you could work collaboratively on a project : As you begin to use OneDrive to manage your files and folders please consider how you might be able to share files and/or plan collaboratively on projects using OneDrive. Describe how you could work collaboratively on a project
Show the variances between the master budget and actual cost : Policies worth $13,000,000 were outstanding during the period. Prepare a schedule to show the variances between the master budget and actual costs for this operation.
Number of people is working at minimum wage : We observe that the same number of people is working at the minimum wage in year 2 as in year 1. Does it follow that an increase in the minimum wage does not cause some workers to lose their jobs? Explain your answer.
Why a standard cost system may negatively impact : Describe several ways that a standard cost system strengthens management cost control. Describe at least two reasons why a standard cost system may negatively impact the motivation of production employees.
Market demand equation for the fruit seller : There is a fruit seller who has 30 Kgs of apples to be sold and he wants to fix a price so that all the apples are sold. There are three customers in the market and their individual demand functions are given below:
What hosting plan would you consider for your website : What kinds of hosting plans does the company offer? Include elements such as length, price, and features. What hosting plan would you consider for your website? Why would you choose that plan
Determining the slope of budget line : Ali's budget line relating good X and good Y has intercept of 20 unit of good X and 30 units of good Y. if the price of good Y is 10, what is Ali's income? What is the price of good Y? What is then slope of budget line
Perfectly competitive market : A typical firm in a perfectly competitive market made positive economics profit last period. What do you expect will happen this period to

Reviews

Write a Review

Cost Accounting Questions & Answers

  Prepare a sales budget in units and dollars

Prepare a sales budget in units and dollars for the first quarter of 2008 and prepare a schedule of expected cash collections from Customers for the first quarter of 2008

  Electricity costs for the plant assembling

Electricity costs for the plant assembling the Presario computer line of products and transportation costs for shipping the Presario line of products to a retail chain

  Crede company sells a single product that has variable

crede company sells a single product that has variable costs of 10 per unit.nbsp fixed costs will be 700000 across all

  Historical cost concept in the valuing of long-term assets

US GAAP follows the Historical Cost Concept in the valuing of long-Term Assets.

  Should the company go ahead with the new product

This time a range of possible sales targets - rather than only one goal - will be established and evaluated.

  Please make the appropriate entry or entries

Under FAS 123R, how would this transaction be reported in SAS's 12/31/09 year-end financial statements-would these terminated options result in some sort of an adjustment? If there is an adjustment, please make the appropriate entry or entries?

  Compute the optimal order quantity using the eoq model

Compute the optimal order quantity using the EOQ model and compute the number of orders per year and the annual relevant total cost of ordering and carrying inventory.

  Harrys picture manufactures diverse picture frames he

harrys picture manufactures diverse picture frames. he spends 20 on raw material for each frame. every new employee

  Prepare an analysis of the alternatives

Prepare an analysis of the alternatives and make a recommendation to the management of the company of the appropriate course of action.

  Methods of estimating costs-simple regression

Estimate overhead if the company expects the plant to operate at a monthly average of 9,000 machine-hours next year - Methods of Estimating Costs: Simple Regression

  What is the percent of the total variance

Based on the data derived from the regression analysis, what are the estimated costs for 360 maintenance hours in a month and what is the percent of the total variance that can be explained by the regression equation?

  Determine the amount of principal and interest krueger paid

Krueger agreed to repay the principal and interest in 10 annual payments of $7,451.47 at the end of each year. Determine the amount of principal and interest Krueger paid during the first and second year that the note was outstanding.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd