1. List and discuss briefly the three standards of accountability2. Discuss how establishing...

Question

1. List and discuss briefly the three standards of accountability
2. Discuss how establishing standards benefits the following management functions: Performance evaluation and decision making.
3. Explain the source of variable overhead spending and efficiency variances and how these variances are computed.
4. What role does the budgeting activity play in managerial compensation and performance evaluation?
5. Why will there frequently be a difference between the budgeted cost of material in the material purchases budget and the budgeted cash disbursement for material in the cash budget?

6. Garfield Company

Garfield Company applies overhead based on direct labor hours and has the following available for the current month:

Standard:

Direct labor hours per unit 5
Variable overhead per DLH $.75
Fixed overhead per DLH
(based on 8,900 DLHs) $1.90

Actual:

Units produced 1,800
Direct labor hours 8,900
Variable overhead $6,400
Fixed overhead $17,500
1. Refer to Garfield Company. Compute all the appropriate variances using the three-variance approach.

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1.List and discuss briefly the three standards of accountability 2.Discuss how establishing standards benefits the following management functions: Performance evaluation and decision making. 3.Explain the source of variable overhead spending and efficiency variances and how these variances are computed. 4.What role does the budgeting activity play in managerial compensation and performance evaluation? 5.Why will there frequently be a difference between the budgeted cost of material in the material purchases budget and the budgeted cash disbursement for material in the cash budget? 6. Garfield Company Garfield Company applies overhead based on direct labor hours and has the following available for the current month: Standard:Direct labor hours per unit5Variable overhead per DLH$.75Fixed overhead per DLH (based on 8,900 DLHs)$1.90 Actual:Units produced 1,800Direct labor hours8,900Variable overhead$6,400Fixed overhead$17,500 1. Refer to Garfield Company. Compute all the appropriate variances using the three-variance approach.

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Robert · Accepted Answer

1. List and discuss briefly the three standards of accountability
Answer:
The three standards of accountability are:-
i) Presentation of financial statements – It sets the requirement of financial statements including how it should be structured, the minimum requirements of the content and concepts like going concern, the current or non-current distinction, the accrual basis of accounting. It requires complete set of financial statements to consist a statement of financial position, statement of profit or loss, statement of change in equity and statement of cash flows. 
ii) Inventories – It contains the requirement how to account the most type of inventory. It requires inventories to be measured at the low cost and net realizable value and outlines on acceptable method to determine the cost that includes first-in first-out (FIFO), specific identification and weighted average cost.
iii) Revenue – This outlines the accounting requirement to recognize the revenue from the sale of goods, for interest, rendering the services, dividends and royalties. Revenue is measured at fair value and recognized when the conditions are met, which depends on the revenue nature. 
2. Discuss how establishing standards benefits the following management functions: Performance evaluation and decision making.
Answer:
Management encourages to have conversation reflects on the achieving the period. It should be based on the performance standards that agreed on the performance discussion. For the expectations, the evaluation should reflect those which are recently agreed upon. Many variations of forms are available in using the performance evaluation. The choice of the form should reflect the management also specific needs for the employee. Management should ensure that they are following the appropriate performance evaluation and progress process for the employees who are not the achieving the standards.

1. List and discuss briefly the three standards of accountability 2. Discuss how establishing standards benefits the following management functions: Performance evaluation and decision making. 3....

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