Week 5 Assignment
You will utilize the information in this week’s Resources and your course text to consider how variance analysis and the results obtained from conducting such an analysis might impact decision making.
|Metal tubing||6 meters @ $3.00||$18.00|
|Leather||2 square meters @ $7.00||$14.00|
|Padding||3 kilograms @$3.90||$11.70|
|Direct labor||4 hours @ $15||$60.00|
|Total standard cost||$103.70|
This month, Body Comfort Co. manufactured 500 massage chairs. The following costs were incurred:
Actual Costs Incurred for the Month: Massage Chair
|Metal tubing||3,000 meters||$9,455|
|Leather||1,050 square meters||$7,722|
|Direct Labor||1,750 hours||$27,270|
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 Body Comfort Co. 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.
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