Here is the synopsis of our sample research paper on Accounting for Manufacturing Variance. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
A 3 page management accounting paper. Miracle Lights, Inc. has specific standards set for the costs associated with manufacturing its Brightlite line of lighting products. It has experienced variance in the costs of manufacturing, specifically in the price of the raw materials used to produce a case of product and in the amount of raw material used in a case. The purpose here is to examine variances in each. Bibliography lists 1 source.
Page Count:
3 pages (~225 words per page)
File: CC6_KSacctMgmtMat.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
Inc. has specific standards set for the costs associated with manufacturing its Brightlite line of lighting products. It has experienced variance in the costs of manufacturing, specifically in the
price of the raw materials used to produce a case of product and in the amount of raw material used in a case. The purpose here is to examine
variances in each. Price Variance Established standard for the cost of direct materials used to produce a case of product is 5 pounds
at $6.80. This means that production personnel should require 5 pounds of raw materials for each case of product, and that the cost of the raw materials for each
case should be $34. During a sample week, Miracle purchased 11,400 lbs. of raw material at a total cost of $80,940, or $7.10/lb
($80,940 ? 11,400), $0.30/lb above the standard set for the price of direct materials. This brings the cost of raw materials for the production of a single case of
product to $35.50, $1.50 more than Miracle expects. There are several factors that could explain this price differential. One is that Miracles
supplier raised prices. Another is that the supplier simply overcharged by mistake, but Miracles internal actions could contribute to the price variance as well. If Miracle does not
practice sound inventory control measures and found itself with a need for an "emergency" shipment, then it can expect the price to be higher for the quick delivery time.
Miracle also may have good inventory management but be experiencing higher-than-forecasted sales levels. If this order lay outside negotiated totals, then the supplier may be charging prices above that
...