1. As a CPA, one of your client’s asks you whether his manufacturing company should include standard costs in their cost accounting system. List at least two reasons for including standard costs in your client’s cost accounting system and two potential problems with including standard costs in the client’s cost accounting system.

Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. For problems, be sure to answer all questions and provide all requested information.

 

2.

With the following information, compute the throughput time and the manufacturing cycle efficiency:

 

 

 

Wait time	12.0 days
Inspection time	0.9 days
Processing time	3.5 days
Move time	0.2 days
Queue time	2.0 days

 

3.

Antique Reproductions, Inc. estimates its manufacturing costs as follows:

 

 

 

Variable Costs
Direct material	$5.50/unit
Direct labor	2.40/unit
Variable overhead	1.00/unit
Fixed Costs
Supervisor’s salary	$15,000
Production facility depreciation	7,500
Other production costs	1,400

 

 

 

Estimate manufacturing costs for manufacturing levels of 9,000 units, 11,000 units, and 13,000 units.

 

 

4. Tiger Company makes a product and uses the following standard unit costs for that product:

 

 

 

Direct material quantity standard	6 pound per unit
Direct material price standard	$ 9 per pound
Direct labor time standard	3.5 hours per unit
Direct labor rate standard	$12 per hour
Variable manufacturing overhead rate standard	$ 6 per machine hour
Fixed manufacturing overhead rate standard	$ 5 per machine hour
Machine hours standard	3 hours per unit

 

 

 

Given the flowing actual cost and usage data, compute the direct labor rate and the direct labor efficiency variances.

 

5.

Hacking Tech, LLC provides security services for corporate computer systems and uses the following information:

 

�

 

�	Fixed Component Per Month	Variable Component Per Job	Actual Totals for March, 2012
�	�	�	�
Revenue	�	$420	$21,500	�
Tech Analysts� Wages	$7,600	�	$ 7,600	�
Mobile computer lab	$2,100�	� $45	$ 4,395	�
Office expenses	$4,500�	��� $5	$ 4,755	�
Insurance	$1,200	�	$ 1,200	�

 

�

 

The company uses the number of jobs as its measuring activity (for instance, the mobile computer lab expenses for March are $2,100 fixed costs plus $5 per job variable expenses, for the $4,395 total mobile computer lab expenses for March).

 

�

 

Prepare a flexible budget performance report showing the company�s activity variances and revenue and spending variances for March.

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