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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 Continue to post
warehouses, converted from World War II storage depots. By 2020 Clive’s business had expanded to the
point where he felt he must institute some type of formal, systematic controls over his cost. Modern cost 20 questions remaining
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 then coated with a glaze mixture to Snap a photo from your
give it its color and characteristic smooth !nish. The !xture is then baked again (!red) to harden and !x phone to post a question
the glaze to the clay. The !nished product is then shipped to the various wholesale outlets around the We'll send you a one-time download
state. The molding and !ring of ceramics, although not highly complex, requires an experienced potter to link
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 skill. However, too much time
cannot be spent on the molding and glazing processes because delays can cause a bottleneck in the 888-888-8888 Text me
whole production process.
The need for better cost control, coupled with a need for better overall production scheduling to meet the
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increases in demand, led to Clive Petersen to adopt a standard cost system. After extended discussions automated text message with a link to get the app. Standard
messaging rates may apply.
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
______________________________________________________
Horngren's Managerial Principles of
Variable Overhead Cost... Accounting Corporate...
Fixed Overhead 16th Edition 9th Edition 10th Edition

ANALYSIS OF OPERATIONS View all solutions

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 pay any attention to the
“confusing” new system. As one of the potters observed, “ I have been making these !xtures a lot longer
than these new ideas have been around, and 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 1,145 !xtures were noted:
Materials Purchased
Clay 30,000 lb @ $ .92/lb
Glaze 6,000 lb @ $ .78/lb Book Now

Materials Used
Clay 28,900 lb Whenever you're ready to travel, we'll be here.
Please follow local travel and safety guidelines.
Glaze 5,900 lb
Direct Labor
Molding 1,200 hr @ $15.25/hr
Glazing 600 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

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Petersen Pottery Just Outside Of Elkins, West Virg... | Chegg.com 12/5/21, 2:06 PM

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
1. Analyze cost performance for June. Calculate all important variances.
2. What conclusions are suggested regarding cost performance for the month?
3. Write or 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.

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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)

Questions viewed by other students

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

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)

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