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. Under JIT the goal of the company is to produce to meet demand rather than to just fill labor time. Thus, the traditional labor variances are often unfavorable. Throughput time and MCE focus on all elements of manu-facturing—not just labor time. These other elements, which are inde-pendent of labor time, are showing greater efficiency each month as the company eliminates non-value-added activities. Throughput time and MCE are more appropriate in this situation since they focus on those elements that are of greatest importance in a JIT environment. The labor efficiency variance has little or no significance in such an environment. Problem 10-28 (45 minutes)