Using Control Limits to Determine When to Investigate a Variance Kavallia Company set a standard cost for one item at $328,000; allowable deviation is ±$14,500. Actual costs for the past six months are as follows: 11eb7449_c496_4934_a720_d726ded6b2d6_SM1592_00 Required: 1. Calculate the variance from standard for each month. Which months should be investigated? 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or $14,500. Now which months should be investigated?

Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen

النسخة 2الرقم المعياري الدولي: 978-1111824402

Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen

النسخة 2الرقم المعياري الدولي: 978-1111824402

تمرين 17

Using Control Limits to Determine When to Investigate a Variance
Kavallia Company set a standard cost for one item at $328,000; allowable deviation is ±$14,500. Actual costs for the past six months are as follows:

Required:
1. Calculate the variance from standard for each month. Which months should be investigated?
2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or $14,500. Now which months should be investigated?

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1.To calculate the variance, we need tak...