Consider variance analysis in a service industry. Is it a good thing to use or a bad thing to use? Why? What good behaviors could it encourage? What bad behaviors might it encourage? Consider a service industry you are familiar with or something like a call center or tax practice in your discussion.

Consider variance analysis in a service industry. Is it a good thing to use or a bad thing to use? Why? What good behaviors could it encourage? What bad behaviors might it encourage? Consider a service industry you are familiar with or something like a call center or tax practice in your discussion.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 24MC: Which of the following is a possible cause of an unfavorable labor efficiency variance? A. hiring...

See similar textbooks

Similar questions

Which of the following is a possible cause of an unfavorable labor efficiency variance? A. hiring substandard workers B. making too many Units C. buying higher-quality material D. paying too much for workers
What do businesses need to make variance analysis useful?
How frequently do you believe that firms should conduct variance analysis? Explain why?
Analyze the variances that you computed in requirements 1 and 2. Was the new service a success from an overall cost-control perspective? Briefly discuss. What seems to have happened that would give rise to customer complaints?
By comparing the actual findings with the standards and adopting new standards to avoid or reduce deviations, standard cost variance analysis makes it simple for management to evaluate performance against the benchmark. Focusing on the efficiency of the standard cost system and applying any modifications and updates promptly can help to minimize these effects and produce more accurate results when compared to actual data. Do you believe that the standard cost system can help erase these effects completely?
Examine the main reasons why manufacturing companies are more sensitive to material price variances, as compared to labor variances, and determine the importance of companies managing these variances in relation to sustaining profitability.
What types of information can variance analysis provide to the manager? How can it be used? Give examples.
Q.Explain in details with example:- Control and Cost Reduction are the two important factors by which Manufacturing companies may increase their Profits. One of the most important tool is the installation of Standard Costing system. But companies have to be very careful while deciding the Proper interpretation of variances from standard is very important for the success of standard costing system as a tool for Cost Control. Mention some important factors that must be born in your mind while interpreting variances.
Cite a specific example of the application of gross profit variance analysis. How will it help the company in its decision making?
Q.Should Michael Bentfield’s performance evaluation be based solely on price variances? Should the production manager’s evaluation be based solely on efficiency variances? Why is it important for Katharine Johnson to understand the causes of a variance before she evaluates performance?
How do you make a decision in case of special order? Explain. Use examples if required. Explain how standard costs are established? How do managers evaluate performance using cost variance analysis?
Variance analysis is an extremely important tool in accounting, so unfavourable variances must be taken very seriously by accountants and managers”. How would you respond to this statement? Make use of examples in your explanation - 150 words please :)