accounting costs

PLeases see attached. Original work only. Please cite all sources using APA format. NO word minimum. Thank you.

1)

Perform an Internet search using the phrase “reducing overhead costs”. Select and read a case study or article from the results of your search. (Make sure that you do not select an instructor’s lecture notes or a class assignment from the results of your search.) Summarize the case study or article, and relate the ideas of the article to what you have learned this week in this course.

2)

There are several potential problems that can occur from the improper use of standard costs. Labor quantity standards and efficiency variances assume that production is labor-paced. However, output in many companies is determined by the processing speed of machines. Also, too much emphasis on meeting the standards may overshadow other important objectives. Discuss other potential problems that can occur from the improper use of standard costs.

Standard Costs Notes from class

A standard is considered a benchmark. This is used for measuring performance. It is a budgeted amount of something we would expect, so we could have a standard price we expect to pay for materials or a standard number of hours we would expect a unit to take or a standard rate we pay our employees. There are several standards that a company can set to help keep production on track and to evaluate how supervisors are doing.

When we set standards for different areas, we need to make sure to consider the entire cost. For example, the standard price of materials should include all costs that go into getting that material ready for its intended use. That would include the purchase price plus freight, less any discounts that might be applicable. When we set standards for labor, we should include the entire cost of an employee per hour, so that could include employer taxes and fringe benefits. When we are setting standards for quantity, we might also have to consider an allowance for waste or rejects which would need to be added to the normal material requirements to get an overall standard allowed per finished product.

Accountants, engineers, purchasing, and production managers combine efforts to set standards that encourage efficient production. Two types of standards are commonly used—quantity standards that show how much quantity should be used and price standards that specify how much should be paid for each unit of input.