When Domino’s Pizza began operations in 1960, it had a “30 minutes or it’s free” campaign. In making that Promise, the company set a standard time to prepare and deliver a pizza. In 1993, Domino’s completely removed that campaign. Discuss how setting such a standard might have been problematic for Domino’s. can you think of any other organizations in which guaranteeing specific labor time standards might create problems?

 

The Overhead spending and overhead efficiency variances are said to be controllable, but the volume variance is said to be non controllable. explain.

 

Discuss the following statement: Since standard costs are recorded in the inventory accounts in a standard cost system, actual costs are ignored.

 

How are insignificant variances closed at the end of an accounting period? How are significant variances closed at the end of an accounting period? Why is there a difference in treatment?

 

Why do manager care about capacity utilization? are managers controlling costs when they control utilization?

 

 

In November 2013, DayTime Publishing Company’s costs and quantities of paper consumed in manufacturing its 2014 Executive Planner and Calendar were as follows:

Actual unit purchase price ……………………………….. $ 0.13 per page

Standard unit price ………………………………………. $ 0.14 per page

Standard quantity for good production ………………….. 97,900 pages

Actual quantity purchased during November ……………. 115,000 pages

Actual quantity used in November ……………………… 100,000 pages

a. Calculate the total cost of purchases for November.

b. Compute the material price variance (based on quantity purchased).

c. Calculate the material quantity variance.