Performance Analysis (5) Flashcards
Inconsistency with TQM of right in time?
May be inconsistent with a standard cost that includes an allowance for wastage
What is TQM more consistent with?
Environmental cost accuting than a costing system that allows for normal loss in the standard cost
What is a standard cost based on for TQM?
It is based on an assumption of a desirable steady state, this view is inconsistent with principle of continuous improvement
Modern environment when traditional manufacturing has high labour cost, low overhead?
Low labour cost, high overhead
Modern environment when traditional manufacturing has stable environment/products?
Rapidly changing environment/products
Modern environment when traditional manufacturing has standard product?
Customised product
Modern environment when traditional manufacturing has focus on cost?
Focus on quality
Modern environment when traditional manufacturing has raw material and finished goods inventories are important?
JIT philosophy
Low labour cost, high overhead impact of standard costing?
Overhead variances do not have enough detail to aid performance measurement
Rapidly changing environment/products impact of standard costing?
Regular revision of standards can be demotivating for employees as goal posts keep moving
Customised product impact of standard costing?
Differences between products make developing standards difficult. Resulting variances may not be meaningful
Focus on quality impact of standard costing?
Variance analysis encourages cost control. Desired quality may drive adverse price variances
JIT philosophy impact of standard costing?
Inventory may be built up in an effort to improve efficiency variances
