Explore BrainMass

Automobile Support Company

a. What are the objectives for a standard system? How are these objectives being met and not met with the current system?
b. Prepare a set of recommendations for changes in the system. What implementation issues will be raised by your recommendations?


Solution Preview

The Objectives For A Standard System
1. To determine the actual cost to produce the products that are there in the inventory.
2. To set standards for production next year;
3. Must satisfy the need for interim financial reports to the shareholders;
4. The method must not be expensive or disruptive;
5. To control costs through calculation of variances and analysis;
6. To reflect the actual and current costs of material, labor and overhead costs;
7. To reflect variances that reflects true efficiencies and inefficiencies.
In reality there the standard in the system should provide a yardstick for measuring the performance of Automobile Support Company. This measure is in terms of predetermined cost which determines in advance what each product should cost under certain circumstances. The objectives of the standard system are measurement of efficiency, the finding of variance, finding out the exceptions and managing them, control of costs, making correct decisions and eliminating inefficiencies. These are the objectives ...

Solution Summary

This solution gives you a detailed discussion on Automobile Support Company. The expert prepares a set of recommendation for changes in the systems.