Establishing a Standard Cost System

question 2

Essay

Establishing a Standard Cost System
The Tippa Canoe Company makes fiberglass canoes.The fiberglass resin is initially molded to the shape of a canoe,then sanded and painted.Metal or wooden seats and frames are added for stability.The Tippa Canoe Company was started several years ago in the owner's garage.The owner,Jeff George,did a lot of the initial manual labor with the help of a few friends.The company has since expanded into a large warehouse and new employees have been hired.Because of the expansion,Jeff is no longer directly involved with production and is concerned about his ability to plan for and control the company.He is considering the implementation of a standard cost system.
Required:
a.Describe the procedures Jeff should use in setting standards for direct labor and direct materials.
b.Describe how Jeff could use standards for planning purposes,
c.Describe how Jeff could use standards for motivating employees and problems in using standards as performance measures.
d.Why are some of Jeff's friends who worked with from the beginning not very excited about a change to a standard cost system?

Understand the principles and applications of various training techniques and programs.

Grasp the concept of emotional intelligence and its significance in the workplace.

Identify the components necessary for effective training and conditions conducive to learning.

Recognize the role of ethics and corporate social responsibility in management training.

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Definitions:

Competing Corporations

Companies operating in the same industry, market, or field that vie for the same customer base and resources.

Robinson-Patman Act

Legislation aimed at eliminating discrimination in pricing and promotional allowances among purchasers of the same product.

Cost Justification

The process of demonstrating that a proposed expenditure or investment is worthwhile based on the anticipated benefits exceeding the costs.

Quantity Discounts

Discounts offered to buyers for purchasing large volumes of goods, encouraging bulk purchasing.