Eileen Bellows Is Controller at a New,rapidly Growing Company That

question 31

Essay

Eileen Bellows is controller at a new,rapidly growing company that produces replacement windows for existing houses or for initial installation in new houses.Competition is stiff in this industry,but the company for which Eileen works is aggressive in sales development,and just showed a modest profit for the first year since its founding four years ago.Howard Zeller is controller at Accents Incorporated,an established drapery and blinds manufacturer.Accent is an industry leader and has experienced sustained growth in both sales and profits for the past five years.Eileen: Our manufacturing support costs seem to be growing over time.For planning and control purposes we're using "currently attainable" standards in our standard cost system,including the costing of manufacturing overhead.But now that we're making profit,I've been thinking of a switch to tighter standards.Howard: We've always used ideal standards,although our enforcement of these goals hasn't been strict.It seems to work for us.
Required: What does this conversation say about each company's expectations regarding their standard cost system and anticipated variances from each of the two different systems?

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Definitions:

Dysphasia

A language disorder marked by impairment in the ability to communicate verbally or through written text, often due to brain damage.

Nontraumatic Intracerebral Hemorrhage

A type of stroke caused by bleeding within the brain not caused by external physical trauma.

Acute Myocarditis

A rapid onset inflammation of the heart muscle, which can affect the heart's electrical system and muscle, leading to decreased heart function.

Streptococcus

A genus of spherical, Gram-positive bacteria, some species of which are responsible for diseases such as strep throat, pneumonia, and scarlet fever.