The Tippa Canoe Company makes fiberglass canoes. The fiberglass resin is initial

Question

The Tippa Canoe Company makes fiberglass canoes. The fiberglass resin is initially molded to the shape of a canoe, then sanded and painted. Metal or wooden seats and frames are added for stability. The Tippa Canoe Company was started several years ago in the owner's garage. The owner, Jeff George, did a lot of the initial manual labor with the help of a few friends. The company has since expanded into a large warehouse and new employees have been hired. Because of the expansion, Jeff is no longer directly involved with production and is concerned about his ability to plan for and control the company. He is considering the implementation of a standard cost system.a. Describe the procedures Jeff should use in setting standards for direct labor and direct materials.b. Describe how Jeff could use standards for planning purposes,c. Describe how Jeff could use standards for motivating employees and problems in using standards as performance measures.d. Why are some of Jeff's friends who worked with from the beginning not very excited about a change to a standard cost system? The Tippa Canoe Company makes fiberglass canoes. The fiberglass resin is initially molded to the shape of a canoe, then sanded and painted. Metal or wooden seats and frames are added for stability. The Tippa Canoe Company was started several years ago in the owner's garage. The owner, Jeff George, did a lot of the initial manual labor with the help of a few friends. The company has since expanded into a large warehouse and new employees have been hired. Because of the expansion, Jeff is no longer directly involved with production and is concerned about his ability to plan for and control the company. He is considering the implementation of a standard cost system.a. Describe the procedures Jeff should use in setting standards for direct labor and direct materials.b. Describe how Jeff could use standards for planning purposes,c. Describe how Jeff could use standards for motivating employees and problems in using standards as performance measures.d. Why are some of Jeff's friends who worked with from the beginning not very excited about a change to a standard cost system?

Explanation / Answer

procedures Jeff should use in setting standards for direct labor and direct materials should be working hours. since standard costing system has only one cost driver so it should be selected by taking care. Jeff could use standards for motivating employees and problems in using standards as performance measures by saying that their salery is directly proportional to the number of hours they work. By this worker will get some motivation to work more. some of Jeff's friends who worked with from the beginning not very excited about a change to a standard cost system because they think that using only one cost driver is not good. their are jobs in which precision is required instead of just labour hours. and they think that they should get mor wages as the are working since the starting of the company

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