Major areas within management accounting where learning curve theory is likely to have consequences and suggest potential limitations of this theory.
Areas of consequence:
* A Standard Costing system would need to set standard labour times after the learning curve had reached a plateau. * A budget will need to incorporate a learning cost factor until the plateau is reached. * A budgetary control system incorporating labour variances will have to make allowances for the anticipated timechanges. * Identification of the learning curve will permit the company to better plan its marketing, work scheduling, recruitment and material acquisition activities. * The decline in labour costs will have to be considered when estimating the overhead apportionment rate. * As the employees gain experience they are more likely to reduce material wastage.
* The stable conditions necessary for the learning curve to take place may not be present – unplanned changes inproduction techniques or labour turnover will cause problems and affect the learning rate. * The employees need to be motivated, agree to the plan and keep to the learning...