Project #31442 - Computing Material Quantity Variance - DISCWk5

Variance analysis is an important component of assessing organizational performance and efficiency throughout the organization and within departments. By comparing anticipated or standard performance with actual performance, you can clearly identify problematic areas where costs might be reduced. After reviewing this week’s Resources, consider how variances can affect an organization’s ability to adhere to its budgets for operating costs, materials, and other factors. As an HR Manager, HR expenses can be a significant part of the organizational budget. In related coursework, you’ll assess how to compute the return on investment of various HR initiatives in employee development, selection and training.

 

Curtailing Costs at the Good Times Company

 


The Good Times Company is a leading manufacturer of family-friendly board and card games. Company executives suspect that the high cost of materials has been eating away at organizational profits and consequently have dramatically impacted employee and managerial annual bonuses. Group C is the expert group on material cost variances and has been asked to conduct an investigation into the company’s material costs and determine if the costs are justified and what can be done to lower them without lowering quality of the product.

 

The Good Times Company’s budget for materials for the year is as follows:

The actual number of games produced was 12,000 games. Standard costs for each game were 3.5 pounds of material at a cost of $22.50 per pound. The actual costs for each game were 3 pounds of material at a cost of $25.00 per pound.

 

As an HR professional, do these values cause any concern on the potential impact on the budget for planned HR initiatives? How so?

Compute the total material variance, the material price variance, and the material quantity variance. Discuss the results of your computations and determine what they mean. Prepare a report summarizing your findings and recommend key areas where changes should be considered. Write a 2- to 3-page paper in.


You will set up and use an Excel spreadsheet for all your calculations for the problems above, and the spreadsheet you develop should be what you turn in.

 

 

Subject Business
Due By (Pacific Time) 05/26/2014 12:00 pm
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