a. What problems are associated with using the average cost per unit as a performance measure? b. What problems are associated with using the variable cost per unit as a performance measure?
a. What problems are associated with using the average cost per unit as a performance measure? b. What problems are associated with using the variable cost per unit as a performance measure?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The manager of the manufacturing unit of a company is responsible for the costs of the manufacturing
unit. The president is in the process of deciding whether to evaluate the manager of the manufacturing unit
by the average cost per unit or the variable cost per unit. Quality and timely delivery would be used in
conjunction with the cost measure to reward the manager.
Requlred:
a. What problems are associated with using the average cost per unit as a performance measure?
b. What problems are associated with using the variable cost per unit as a performance measure?
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