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Just outside of Elkins, West Virginia, high in the Appalachian Mountains, Clive Petersen
had been making ceramic bathroom !xtures since 1980. Petersen !xtures (commonly
called toilets) had become known over the years for their distinctive custom features, and
their long life. Petersen Pottery had grown from a two-man operation in 1990 to the
present group of 20 master potters located in two huge old warehouses, converted from Continue to post
World War II storage depots. By 2020 Clive’s business had expanded to the point where
20 questions remaining
he felt he must institute some type of formal, systematic controls over his cost. Modern
cost systems were becoming a prerequisite for the bank loans, which funded Clive’s
expansion and continuing operations.
The manufacture of ceramic !xtures consists of three processes: molding, glazing, and
!ring. Raw clay is !rst molded into the desired shape and baked in a kiln to harden. It is Snap a photo from your
then coated with a glaze mixture to give it its color and characteristic smooth !nish. The phone to post a question
!xture is then baked again (!red) to harden and !x the glaze to the clay. The !nished We'll send you a one-time download
product is then shipped to the various wholesale outlets around the state. The molding link
and !ring of ceramics, although not highly complex, requires an experienced potter to
assure the quality of the product. Excessive heat or excessive time in the kiln can ruin a
!xture. The mixing and application of the glaze also requires a signi!cant amount of 888-888-8888 Text me
skill. However, too much time cannot be spent on the molding and glazing processes
because delays can cause a bottleneck in the whole production process.
By providing your phone number, you agree to receive a one-time
The need for better cost control, coupled with a need for better overall production automated text message with a link to get the app. Standard
scheduling to meet the increases in demand, led to Clive Petersen to adopt a standard cost messaging rates may apply.

system. After extended discussions with his most experienced master potters, Clive and
his new accountant arrived at the following cost standards:
Materials
Raw Clay 25 lb @ $.95/lb $23.75 My Textbook Solutions
Glazing Mix 5 lb @ $.75/lb 3.75
Direct Labor
Molding 1 hr @ $15/hr 15.00
Glazing .5 hr @ $15/hr 7.50
______________________________________________________
ANALYSIS OF OPERATIONS
After 6 months of operations using the new cost system Clive was disturbed over the lack
of attention paid to the standards. He felt that the potters were just too set in their ways to Horngren's Managerial Principles of
Cost... Accounting Corporate...
pay any attention to the “confusing” new system. As one of the potters observed, “ I
16th Edition 9th Edition 10th Edition
have been making these !xtures a lot longer than these new ideas have been around, and
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I don’t see how a bunch of numbers that some hot-shot accountant puts together are
going to help me make any better toilets.” The result was that although the standards
existed, they were seldom met.
In reviewing the June production results, the following actual costs for 1,200 !xtures
were noted:
Materials Purchased
Clay 40,000 lb @ $ .92/lb
Glaze 7,000 lb @ $ .78/lb
Materials Used
Clay 31,000 lb
Glaze 6,100 lb
Direct Labor
Molding 1,400 hr @ $15.25/hr
Glazing 700 hr @ $15.00/hr
Before proceeding with further analysis, Clive met with his most experienced master
potter, Jim Sedge!eld, to discuss the continued variances from the standards. He was
seriously considering implementing a standard metal mold system to replace the existing
manual system of shaping !xtures. When Sedge!eld arrived, Clive explained the
problem: “Jim, you insist the standards are reasonable and yet you never meet them. It
looks like we will have unfavorable variances again this month.” Sedge!eld was not
impressed. “Well Clive,” he said, “I don’t understand this system at all. Why don’t you
ask that fast-talking accountant to explain the variances? He seems to know what these
numbers mean. All I know is, we seemed to spend all month fussing with that new brand
of clay you said was going to be cheaper for us.”
QUESTIONS

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Petersen Pottery Just Outside Of Elkins, West Virg... | Chegg.com 12/5/21, 11:08 AM

1. 2 points Analyze cost performance for June. Calculate all important variances. (This
will take approximately 1 page.)
2. 1 point Are costs out of control for the month? Take a stand, one way or the other
and defend it. (This will take approximately 1 paragraph.)
3. 2 points Type a rough draft of a report to Clive detailing the major problems you !nd
with the system or operations. You must have three presented in order of
importance with one paragraph for each. Use the style shown below.
1. First major problem explicitly stated in a paragraph which explains it along with
any recommendations. MUST HAVE RECOMMENDATIONS.
2. Second major problem explicitly stated in a paragraph which explains it along
with any recommendations. MUST HAVE RECOMMENDATIONS.
3. Third major problem explicitly stated in a paragraph which explains it along with
any recommendations. MUST HAVE RECOMMENDATIONS.

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Q: Petersen Pottery Just outside of Elkins, West Virginia, high in the Appalachian Mountains, Clive Petersen had been
making ceramic bathroom !xtures since 1980. Petersen !xtures (commonly called toilets) had become known over the
years for their distinctive custom features, and their long life. Petersen Pottery had grown from a two-man operation
in 1990 to the present group of 2...

A: See answer 100% (2 ratings)

Q: Please help solve the petersen pottery case. The questions are as follows: Analyze the variances for the month using
whatever format you like. What conclusions are suggested regarding cost performances for the month? What
suggestions do you have for Mr. Petersen regarding his new standard cost system? Thank you for your time and help.
Really appreciate it.

A: See answer

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