EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

5. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD 5. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
5. Some supervisors and managers rarely deal with, or think in terms of, dollars in their daily work. Instead they think in terms of hours, units, efficiency, and so on. For these managers, it may be better to express quantity variances in units (hours, yards, etc.) rather than in dollars. For other managers, quantity variances expressed in terms of dollars may be more useful—particularly to convey a notion of the materiality of the variance. In some cases, managers may prefer that the variances be expressed in terms of both dollars and units. On the other hand, price variances expressed in units (hours, yards) would make little sense. Such variances should always be expressed in dollars. Problem 10-24 (45 minutes)