23 power company has been unhappy with the financial accounting variances that its c 4309353

23) 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:

20112012

Remote control units produced and sold80,000100,000

Direct manufacture labor-hours12,00013,200

Direct materials used (sets)80,600100,500

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 2011 and 2012? 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?

24) Grader Company manufactures road graders. Because its managers all have engineering backgrounds, they prefer nonfinancial information for their decision-making models. Therefore, they require the accountants gather data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of a paver:

20112012

Units produced and sold6,8005,600

Direct manufacture labor-hours136,000115,200

Direct materials used (tons)29,00024,400

Direct manufacture cost per hour$21$22

Direct materials cost per ton$431$443

Required:

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

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

c.What is the total factor productivity for each year?

25) Fairytale Weddings manufactures wedding dresses. The following information relates to the manufacture of gowns in its Perth plant:

20X120X2

Units produced and sold43,00052,600

Direct manufacture labor-hours22,00026,000

Direct materials used (square yards)130,000152,000

Direct manufacture cost per hour$16$17

Direct materials cost per yard$10$11

Required:

Prepare an analysis of change in annual costs from 20X1 to 20X2 including direct materials, direct manufacturing labor, and total inputs.

26) Ralph Company has been very aggressive in developing various types of financial and nonfinancial measurement schemes to help with the evaluation of its manufacturing processes. It appears that some of the managers are suboptimizing in that their decision processes are geared solely for their department's benefit, sometimes to the detriment of the organization as a whole.

Required:

What changes in the evaluation system could the company implement to help minimize the suboptimization of the managers' decision-making process?

27) Total factor productivity (TFP) is easy to compute for a single-product company. When dealing with a multiproduct company, one of two adjustments must be made. What are these p