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He purpose of this assignment is to assess your ability to: Explain why all costs are controllable at some point, but in the short run some costs may be classified as noncontrollable

Finance

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He purpose of this assignment is to assess your ability to:

• Explain why all costs are controllable at some point, but in the short run some costs may be classified as noncontrollable.
• Explain the two components of a standard cost variance, and compare the specific variances assigned to different product inputs.
• Analyze how the control of fixed overhead variances and that of variable cost variances differ.
• Explain how return on investment and residual income are used to evaluate investment center performance, and explain the benefits of a balanced scorecard.

Answers to the following problem:

• Homework problem number 15.21 [Chapter 15 - Marshall, McManus, Viele (2014)]

 

Problem number 15.21

 

Frequency of performance reporting If a company uses a standard cost system, should all variances be calculated with the same frequency (e.g., monthly) and should they always be expressed in dollar amounts? Explain your answer and include in it the reason for calculating variances.