View the step-by-step solution to:

Borderless City Landscape Inc (BCL) recently decided to implement a standard costing system for all the different kinds of yard and lawn services it...

Borderless City Landscape Inc (BCL) recently decided to implement a standard costing system for all the different kinds of yard and lawn services it provides to customers. For its “standard” service, it determined the following ideal standards:

 

Direct Materials

47 kilograms of soil; 20 bunches of foilage

Direct Labour

10.8 hours

 

The following additional information is available:

 

Six percent of the soil transported to the customer's work site is blown away during transportation.

For every 10 kilograms of usable soil, half a kilogram is considered unusable and thrown away.

For every 10 usable bunches of foliage, one is considered unusable and thrown away.

On an average yard, labourers spend 10% of their total work time redoing portions of the work.

Yard workers put in seven-hour days including three breaks of 20 minutes each for rest, nutrition, and cleanup.

The standard price of direct materials is soil, $7.20 per kilogram, and foliage, $3.50 per bunch.

Yard labour is paid at the rate of $12 per hour including benefits.

 

 

Required:

Calculate the practical quantity standards for direct materials and direct labour required to provide “standard” service to a customer. Show all the steps in your calculation. (12 marks)

Calculate the standard costs of providing “standard” service to a customer. (6 marks)

As part of the implementation of a standard costing system at BCL, Dale Useless (a cost accountant) plans to train those responsible for maintaining the standards on how to use variance analysis. Wakefield is particularly concerned with the causes of unfavorable variances.

Discuss possible causes of unfavorable materials price variances, and identify the individual(s) who should be held responsible for these variances. (6 marks)

Discuss possible causes of unfavourable labour efficiency variances, and identify the individual(s) who should be held responsible for these variances. (6  marks)

Top Answer

The best way to approach your question... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online