Section 9 - Chap 8 - AEM 323 Section Problem Set 9 Covering...

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AEM 323 Section Problem Set 9 Covering Material from Chapter 8 Problem 1 a. What does management by exception mean? b. A purchasing manager of a widget company decides to purchase lower grade steel, the primary material for widgets. As a result, there are more defected widgets made, workers have trouble making widgets and senior employees are called in to help. What variances do you expect to arise and are they favorable or unfavorable? c. What manager is usually in the best position to influence direct-labor rate efficiency variance? d. What are some advantages of the standard costing system? 1
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Problem 2 Gerhard’s bakery makes quality carrot cakes. There is 2.5 pounds of material in the finished product. For each cake, there is .25 pounds allowance for normal waste. Each pound of ingredients costs $1.50. There is a $0.10 a pound purchase discount. Transportation per pound is $0.15. Gerhard’s workers receive an hourly wage of $20. In addition, fringe benefits that Gerhard must pay out is 25% of the wages. Each carrot cake
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Section 9 - Chap 8 - AEM 323 Section Problem Set 9 Covering...

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