management accounting assigno.docx - Causes of labor...

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Causes of labor efficiency variance Overstaffing and understaffing Hours of overtime Productivity changes resulting in more or fewer hours used per production unit Instructions . The employees may not have received written work instructions. Mix . The standard assumes a certain mix of employees involving different skill levels, which does not match the actual staffing. Training . The standard may be based on an assumption of a minimum amount of training that employees have not received. Workstation configuration . A work center may have been reconfigured since the standard was created, so the standard is now incorrect. Lack of proper supervision or stricter supervision that specified. Poor working conditions Delay due to, waiting for materials tools, instructions etc. if not treated as idle time. Defective machine tools, and other equipments. Machine break down if not booked to idle time. Work on new machines requiring less tike then provided for as long as the standard is not revised. Basic inefficiency of workers due to low morale, insufficient training, faulty instructions, incorrect scheduling of jobs etc. Use of non standard material requiring more or less operation wages. Carrying our operations not provided for and booking them as direct wages. In correct standards Wrong selection of workers, e.g. no employing the right type of man for doing the job. Increase in labour turnover. Incorrect recording of performances, i.e. time and output. Advertisement Techniques of cost reduction Value Engineering Value Analysis Work Study Material Handling Quality Measurement and Research
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Operations Research Market Research Quality Control Standardization and Simplification Improvement in Design Target Costing Target costing also called product costing method in which an attempt at the planning and development phase of a product life cycle to attain a specified cost that is decided by management. This approach is to seek the lower costs by designing a quality product that reduces costs in the production phase. It can be described as a systematic process of cost management and profit planning.
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