close solutoin list

Communication Carol Creedence, the plant manager of the Clearwater Company’s Revival plant, has prepared the following graph of the unit costs from the job cost reports for the plant’s highest volume product. Product CCR: Carol is concerned about the erratic and increasing cost of Product CCR and has asked for your help. Prepare a hall-page memo to Carol, interpreting this graph and requesting any additional information that might be needed to explain this situation.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 19, Problem 19.3CP
Textbook Problem

Communication

Carol Creedence, the plant manager of the Clearwater Company’s Revival plant, has prepared the following graph of the unit costs from the job cost reports for the plant’s highest volume product. Product CCR:

Chapter 19, Problem 19.3CP, Communication Carol Creedence, the plant manager of the Clearwater Companys Revival plant, has

Carol is concerned about the erratic and increasing cost of Product CCR and has asked for your help. Prepare a hall-page memo to Carol, interpreting this graph and requesting any additional information that might be needed to explain this situation.

Expert Solution
To determine
Half page memo to C Company.

Explanation of Solution

MEMO

FROM:

XYZ

Accountant

TO:

Mr. C

Plant Manager

Company C.

Re: Interpretation of graph and information needed to explain the current situation.

Dear Sir,

The graph of job cost of Product CCR indicates that there are certain important trends prevalent. On the first instance, one can observe that there is a steady increase in unit cost over the period with the unit cost increasing significantly over the time. Secondly, there appears to be a sturdy and consistent phenomenon known as ‘Friday effect’. The unit cost increases heavily on Fridays, then falls on each Mondays.

The ‘Friday effect’ is a result of reduction in efficiency of workers and laborers on Fridays. It may be due to the fact that it is the last day of working week. If this phenomenon is found to happen this is not product related, it must appear throughout the plant. The management must acquire all the job cost for all other products in the plant for testing this phenomenon...

Want to see this answer and more?

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

See solution

Chapter 19 Solutions

Accounting
Show all chapter solutions
Ch. 19 - Issuance of materials On May 7, Bergan Company...Ch. 19 - Issuance of materials On August 4, Rothchild...Ch. 19 - Direct labor costs During May, Bergan Company...Ch. 19 - Direct labor costs During August, Rothchild...Ch. 19 - Factory overhead costs During May, Bergan Company...Ch. 19 - Factory overhead costs During August, Rothchild...Ch. 19 - Applying factory overhead Bergan Company estimates...Ch. 19 - Applying factory overhead Rothchild Company...Ch. 19 - Job costs At the end of May, Bergan Company had...Ch. 19 - Job costs At the end of August, Rothchild Company...Ch. 19 - Transactions in a job order cost system Five...Ch. 19 - Cost of materials issuances under the FIFO method...Ch. 19 - Entry for issuing materials Materials issued for...Ch. 19 - Entries for materials GenX Furnishings...Ch. 19 - Entry for factory labor costs A summary of the...Ch. 19 - Entry for factory labor costs The weekly time...Ch. 19 - Entries for direct labor and factory overhead...Ch. 19 - Factory overhead rates, entries and account...Ch. 19 - Predetermined factory overhead rate Street....Ch. 19 - Predetermined factory overhead rate Poehling...Ch. 19 - Entry for jobs completed; cost of unfinished jobs...Ch. 19 - Entries for factory costs and jobs completed Old...Ch. 19 - Financial statements of a manufacturing firm The...Ch. 19 - Decision making with job order costs Alvarez...Ch. 19 - Decision making with job order costs Raneri...Ch. 19 - Job order cost accounting for a Service company...Ch. 19 - Job order cost accounting for a service company...Ch. 19 - Entries for costs in a job order cost system...Ch. 19 - Entries and schedules for unfinished jobs and...Ch. 19 - Job order cost sheet Remnant Carpet Company sells...Ch. 19 - Analyzing manufacturing cost accounts Fire Rock...Ch. 19 - Flow of costs and income statement Ginocera Inc....Ch. 19 - Entries for costs in a job order cost system Royal...Ch. 19 - Entries and schedules for unfinished Jobs and...Ch. 19 - Job order cost sheet Stretch and Trim Carpet...Ch. 19 - Analyzing manufacturing cost accounts Clapton...Ch. 19 - Flow of costs and income statement Technology...Ch. 19 - Communication TAC Industries sells heavy equipment...Ch. 19 - Predetermined overhead rates As an assistant cost...Ch. 19 - Communication Carol Creedence, the plant manager...Ch. 19 - Job order decision making and rate deficiencies...Ch. 19 - Recording manufacturing costs Todd Lay just began...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
What are the major elements of SWOT analysis?

Foundations of Business (MindTap Course List)

Who issues a credit memorandum and why?

College Accounting (Book Only): A Career Approach

CURRENT YIELD, CAPITAL GAINS YIELD, AND YIELD TO MATURITY Hooper Printing Inc. has bonds outstanding with 9 yea...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is the quantity decision? The pricing decision?

Cornerstones of Cost Management (Cornerstones Series)