What are five factors managers often consider when determiningthe significance of a variance?What are...What...

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Accounting

What are five factors managers often consider when determiningthe significance of a variance?
What are various ways in which standard-costing systems shouldbe adapted in modern manufacturing environment?
What are criticisms of standard costing in a modernmanufacturing environment?

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A standard cost variance is the difference between a standard cost and an actual cost This variance is used to monitor the costs incurred by a business with management taking action when a material negative variance is incurred If actual cost exceeds the standard costs it is an unfavorable variance On the other hand if actual cost is less than the standard cost it is a favorable variance Factors that managers often consider when determining the significance of a variance are as follows the size of variances the extent to which the variances are recurring trends in the variances the controllability of the variances and the perceived costs and benefits of investigating the variances Various ways in which standardcosting should be adapted in todays manufacturing environment are as follows Reduced importance of labor standards and variances As direct labor occupies a diminished role in todays manufacturing environment the standards and variances used to control labor costs also decline in importance Emphasis on material and overhead costs As labor diminishes in its importance material and overhead See Answer

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In: AccountingWhat are five factors managers often consider when determiningthe significance of a variance?What are...What are five factors managers often consider when determiningthe significance of a variance?What are various ways in which standard-costing systems shouldbe adapted in modern manufacturing environment?What are criticisms of standard costing in a modernmanufacturing environment?