Accounting Study Set 8

Business

Quiz 23 :
Performance Eva Uation Usingvariances From Standard Costs

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Quiz 23 :
Performance Eva Uation Usingvariances From Standard Costs

Ethics and Professional conduct of business: Analysis: Dash being a cost analyst determined 36 insurance claims can be processed in an hour, after time and motion study. But the claims processing manager, Henry argued that only 30 claims can be processed per hour. Because of their disagreement on the standard number of claims that can be processed per hour, they agreed to put the matter before the Mr. Anne Boleyn, Vice-president, Operations, who will take a final decision. Before their meeting with the Vice-president, writing a letter to Anne by Mr. Dash is unethical. He should not have written letter to Anne. It is nothing but influencing the decision of Mr. Anne. Dash is preparing a ground to get the support of the Vice-president, operations. It is not the professional way of fixing the standards. Time and motion study may be applicable to physical labour work. But settling of claims is not fully a physical work. Partly physical and partly mental work. So, we should not entirely depend upon time and motion study for this type of work. Dash himself is saying " a tight standard will drive efficiency". It denotes that he fixed a tight standard.

Standard costs assist management in controlling costs and in motivating employees to focus on costs.

Determining standard direct material cost per unit: img Standard material Cost per unit= img = $0.25 img

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