Labor efficiency variance
#1 Using Standards (Professor)
How should standards be used? To what extent should standards be used to attribute responsibility for problems?
#2 Price & Quantity Variances (Professor)
Why are separate price and quantity variances computed?
#3 Why ethical standards? (Professor)
In week 1, we touched on IMA standards. Now that we’re in week 5, have your views on the IMA standards changed at all?
#4 Labor efficiency variance (Student Post)
“The labor efficiency variance measures the difference between the actual hours used and the standard hours allowed for the actual output, multiplied by the standard hourly rate”. Labor efficiency can be affected by lowered production, meaning there are the same amount of workers but as much demand for product.
Garrison. R., Noreen. E., Brewer. P. (2015). Managerial Accounting 15th Edition.
Retrieved from www.phoenix.vitalsource.
#5 Using Standards (Student Response)
Standards should be used as a guideline for management to detect inefficiencies. Standards can be used to detect problems in the production process; however, finding the area with the inefficiency does not always explain the cause of the inefficiency. My husband is a maintenance outage work planner that is also used as a mechanical foreman in specialized situations. When he was a full-time foreman he learned to look ahead at the work that was scheduled for his team. Often the daily planners would schedule work without the necessary manpower or equipment necessary to complete the job. The performance printout can only identify that the work was completed or not. If management wants to find a solution they can’t stop at finding the problem they also have to get to the root cause of the problem.
#6 IMA Ethical Standards (Student Response)
Almost every class in my four years at UOP has a chapter OR segment OR discussion topic about ethics. We all read the papers and headlines, it definitely needs to be more of a part of peoples lives. Here in our accounting field of classes, ethics it of the utmost importance. Dealing with money and sensitive information makes our level of integrity a bar (or more) higher than many other careers. Professionalism, competence, standards, and confidentiality is our ethical responsibility as accountants.
I never tire of this topic. What does it mean to you?
#7 Price Standards (Student Post)
Price standards are the expected costs of production. When costs increase managers look for higher quantities produced or product price increases. If quantities produced did not vary significantly then managers look for the variable that caused the increase. If there were constraints, materials may have been purchased for a source with higher prices; in that case, the price variance would show up in a flexible budget as a deviation from the standard price that should have been paid.
Garrison. R., Noreen. E., Brewer. P. (2015). Managerial Accounting 15th Edition.
Retrieved from www.phoenix.vitalsource.
#8 Direct Variance (Student Post)
The direct materials is the difference between the standard cost of materials resulting from production activities and the actual cost incurred. The direct materials variance is broken down into two elements, material price variance and material quantity variance. A material price variance measures the difference between and inputs actual price and its standard price is multiplied by the actual quantity purchased (Garrison, Noreen & Brewer, 2015). The materials quantity variance measures the difference between the actual quantity of materials used in production and the standard quantity of material allowed for the actual output, multiplied by the standard price per unit of materials (Garrison, Noreen & Brewer, 2015).
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