In the contemporary environment many firms ask their

Assignment Help Accounting Basics

Reference no: EM13586050

Management at Glover & Lamb Inc. is concerned about controlling factory labor-related costs. The following summary is the result of an analysis of the major categories of labor costs for 2013:

Category Amount

Base wages $63,000,000

Health-care benefits 10,500,000

Payroll taxes 5,018,832

Overtime 8,697,600

Training 1,875,000

Retirement benefits 6,898,500

Workers' compensation 1,199,940

Following are some of the potential cost drivers identified by the company for laborrelated costs, along with their 2013 volume levels:

Potential Activity Driver 2013 Volume Level

Average number of factory employees 2,100

Number of new hires 300

Number of regular labor hours worked 3,150,000

Number of overtime hours worked 288,000

Total factory wages paid $71,697,600

Volume of production in units 12,000,000

Number of production process changes 600

Number of production schedule changes 375

a. For each cost pool, determine the cost per unit of the activity driver using the activity driver that you believe has the closest relationship to the cost pool.

b. Based on your judgments and calculations in (a), which activity driver should receive the most attention from company managers in their efforts to control labor-related costs? How much of the total labor-related cost is attributable to this activity driver?

c. In the contemporary environment, many firms ask their employees to work record levels of overtime. What activity driver does this practice suggest is a major contributor to labor-related costs? Explain.

Reference no: EM13586050

Questions Cloud

Use the intermediate value theorem to show that there is a : a tibetan monk leaves the monastery at 700 a.m. and takes his usual path to the top of the mountain arriving at 700

A client operates a small business organized as a sole : a client operates a small business organized as a sole propreintship and is considering change the business to operate

The unit price for hiring labour is k5000 and the unit : a firm has k250000 to spend on labour and raw materials. the output of the firm is axy where a is a constant and x and

Be sure to identify and reference specific aspects of the : as a leader at ecg one of your responsibilities is to help shape a culture of ethics at the organization. address the

In the contemporary environment many firms ask their : management at glover amp lamb inc. is concerned about controlling factory labor-related costs. the following summary is

When an institution writes down an individually impaired : when an institution writes down an individually impaired loan to the appraised value of the collateral because that

At december 31 2012 fell corporation had a deferred tax : at december 31 2012 fell corporation had a deferred tax liability of 703902 resulting from future taxable amounts of

In estimating the cost of a pile of bricks measured as : in estimating the cost of a pile of bricks measured as 2m15m1.2mthe tape is stretched 1 beyong the standard length if

On december 15 2014 arenes corporation declared a cash : in an examination of arenes corporation as of december 31 2014 you have learned that the following situations exist. no

User Account

All Pages