In a 1 to 2-page paper, explain why most companies use “normal” or “standard” costing instead of actual costing. Since the “standard” amounts are estimates which are usually not 100% accurate, why don’t they use the more accurate actual costing?
Write a memo to management defining, explaining, and interpreting each of the variances you calculated in Requirement 5.
Requirements Requirement 1: After reviewing the quarterly and annual income statements based on actual costing, the firm’s management had considered shutting down operations for the two quarters showing losses. Bob Forest was concerned with this possibility. Why? Make a convincing argument as to why management should not base its decision to cease operations on financial […]