Reference no: EM132959312

You are the HR Manager at Great Canes Inc., a company that manufactures walking canes. The company currently does not use a standard costing system. The Controller would like to implement this approach, but the President is not convinced. The Controller is very worried about having her next conversation with the President. She knows that you understand the benefits (and limitations) of a standard costing system, and has asked if you would help her put the main concepts into writing, so that she can be more prepared for her conversation.

Required:

we have to Draft a Memo to the Controller that covers the following:

Problem 1) An explanation of what a Standard Costing System is, including the difference between a quantity standard and a price standard, and what is meant by variance.

Problem 2) A discussion on the key advantages and limitations to a Standard Costing System, including the importance of not using standards as punitive tools.

Problem 3) Discuss who might be responsible for the materials price variance, the materials quantity variance and the labour efficiency variance.