Explore BrainMass
Share

Operating system using standard absorption cost: Anderson Ltd.

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Anderson Ltd. manufactures gearboxes for use in cars. At the start of the year, the management of Anderson Ltd. estimated that its costs would be:
Direct labor 8% sales value
Direct material 50% sales value
Variable production overhead 8% sales value
Fixed production overhead 12% sales value

This was based on the following:
80 employees
2000 hours worked by each employee
40 000 gearboxes manufactured in the year as budgeted production
£200 unit selling price.

You have recently been employed by the company to establish a standard costing system. At the end of the year you were able to extract the following information:
- Labor costs £4.40/hour
- 32 000 units sold
- £210/unit selling price
- 160 000 hours were worked
- Variable production overheads were £640 000
- fixed production overheads were £810 000
- Administration costs were £350 000
- Raw material prices were 10% higher than expected
- Total expenditure on raw material was £3.696 M
- There were no opening or closing stocks of raw materials.

QUESTION- You are required to prepare an operating statement for the year, using a standard absorption costing system.

Direct Labor=
Direct Materials=
Total=

Selling price=
Standard profit (per unit) =
Budgeted profit=
Sales price variance=
Sales quantity variance=

Cost Variances
Labor Variances
Standard hours =
Standard cost/hour =
Rate variance =
Standard time =
Actual time =
Time variance =
Efficiency variance =

Material Variances
Material price =
Material usage standard =
actual =
Material usage variance =

Standard cost £/hour =
Expenditure variance =
Standard cost =
Actual cost =
Efficiency variance (time Ã? cost) =

Expenditure variance =
Volume variance =

Expenditure variance =
Volume variance =

Solution Summary

The expert examines operating systems using standard absorption costs for Anderson Ltd.

\$2.19

Crocs Supply Chain and Competitive Advantage

Read the Stanford Graduate School case study, Crocs: Revolutionizing an Industry's Supply Chain Model for Competitive Advantage

Answer the study questions below in depth:

1) What are Croc's core competencies?

2) How do they exploit these competencies in the future? Consider the following
alternatives:
a. Further vertical integration into materials
b. Growth by acquisition
c. Growth by product extension

3) To what degree do the alternatives in Question 2 fit the company's core competencies,
and to what degree do they defocus the company away from its core competencies?

4) How should Crocs plan its production and inventory? How would the company's gross
margins affect this decision?

5) Think of a Croc competitor. How does their supply chain process compare and contrast?

View Full Posting Details