Author Question: Power Company has been unhappy with the financial accounting variances that its cost accounting ... (Read 52 times)

fahad · **on:** Mar 6, 2021

Power Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of remote control units for televisions, radios, and stereo components:

2016

2017

Remote control units produced and sold

80,000

100,000

Direct manufacture labor-hours

12,000

13,200

Direct materials used (sets)

80,600

100,500

Direct manufacture cost per hour

$18

$20

Direct materials cost per set

$31

$32

Required:

a.	What is the partial productivity of direct materials for each year?

b.	What is the partial productivity of direct manufacturing labor for each year?

c.	Did each area improve between 2016 and 2017? Explain.

d.	What will be the projected direct material and labor needs for 2013 if remote control units

increase by 12,000 units, assuming Power Company applies the constant returns to scale technology?

ngr69 · **Reply #1 on:** Mar 6, 2021

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