Jayzee Company manufactures a variety of products in a variety of depart- ments and evaluates departments and departmental managers by comparing actual cost and output rela- tive to the budget. Departmental managers help create the budgets and usually provide information about input quantities for materials, labor, and overhead costs. Kurt Jackson is the manager of the department that produces product Z. Kurt has estimated these inputs for product Z: Input Budget Quantity per Unit of Output Direct material 8 pounds Direct manufacturing labor 30 minutes Machine time 24 minutes The department produces about 100 units of product Z each day. Kurt's department always gets excellent evaluations, sometimes exceeding budgeted production quantities. For each 100 units of product Z pro- duced, the company uses, on average, about 48 hours of direct manufacturing labor (eight people working 6 hours each), 790 pounds of material, and 39.5 machine-hours. Top management of Jayzee Company has decided to implement budget standards that will challenge the workers in each department, and it has asked Kurt to design more challenging input standards for prod- uct Z. Kurt provides top management with the following input quantities: Input Budget Quantity per Unit of Output 7.9 pounds Direct material Direct manufacturing labor 29 minutes Machine time 23.6 minutes
Jayzee Company manufactures a variety of products in a variety of depart- ments and evaluates departments and departmental managers by comparing actual cost and output rela- tive to the budget. Departmental managers help create the budgets and usually provide information about input quantities for materials, labor, and overhead costs. Kurt Jackson is the manager of the department that produces product Z. Kurt has estimated these inputs for product Z: Input Budget Quantity per Unit of Output Direct material 8 pounds Direct manufacturing labor 30 minutes Machine time 24 minutes The department produces about 100 units of product Z each day. Kurt's department always gets excellent evaluations, sometimes exceeding budgeted production quantities. For each 100 units of product Z pro- duced, the company uses, on average, about 48 hours of direct manufacturing labor (eight people working 6 hours each), 790 pounds of material, and 39.5 machine-hours. Top management of Jayzee Company has decided to implement budget standards that will challenge the workers in each department, and it has asked Kurt to design more challenging input standards for prod- uct Z. Kurt provides top management with the following input quantities: Input Budget Quantity per Unit of Output 7.9 pounds Direct material Direct manufacturing labor 29 minutes Machine time 23.6 minutes
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Q.Why do you suppose Kurt picked these particular standards?
Transcribed Image Text:Jayzee Company manufactures a variety of products in a variety of depart-
ments and evaluates departments and departmental managers by comparing actual cost and output rela-
tive to the budget. Departmental managers help create the budgets and usually provide information about
input quantities for materials, labor, and overhead costs.
Kurt Jackson is the manager of the department that produces product Z. Kurt has estimated these
inputs for product Z:
Input
Budget Quantity per Unit of Output
Direct material
8 pounds
Direct manufacturing labor
30 minutes
Machine time
24 minutes
The department produces about 100 units of product Z each day. Kurt's department always gets excellent
evaluations, sometimes exceeding budgeted production quantities. For each 100 units of product Z pro-
duced, the company uses, on average, about 48 hours of direct manufacturing labor (eight people working 6
hours each), 790 pounds of material, and 39.5 machine-hours.
Top management of Jayzee Company has decided to implement budget standards that will challenge
the workers in each department, and it has asked Kurt to design more challenging input standards for prod-
uct Z. Kurt provides top management with the following input quantities:
Input
Budget Quantity per Unit of Output
7.9 pounds
Direct material
Direct manufacturing labor
29 minutes
Machine time
23.6 minutes
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education