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ECTIVE O2 EXERCISES Exercise 9.12 Setting Standards, Ethical Behavior Quincy Farms is a producer of items made from farm products that are distributed to supermar- kets. For many years, Quincy's products have had strong regional sales on the basis of brand recognition. However, other companies have been marketing similar products in the area, and price competition has become increasingly important. Doug Gilbert, the company's controller, is planning to implement a standard costing system for Quincy and has gathered considerable in- formation from his coworkers on production and direct materials requirements for Quincy's products. Doug believes that the use of standard costing will allow Quincy to improve cost con- trol and make better operating decisions. Quincy's most popular product is strawberry jam. The jam is produced in 10-gallon batches and each batch requires six quarts of good strawberries. The fresh strawberries are sorted by hand before entering the production process. Because of imperfections in the strawberries and spoilage, one quart of strawberries is discarded for every four quarts of acceptable berries. This ECTIVE O2 EXERCISES Exercise 9.12 Setting Standards, Ethical Behavior Quincy Farms is a producer of items made from farm products that are distributed to supermar- kets. For many years, Quincy's products have had strong regional sales on the basis of brand recognition. However, other companies have been marketing similar products in the area, and price competition has become increasingly important. Doug Gilbert, the company's controller, is planning to implement a standard costing system for Quincy and has gathered considerable in- formation from his coworkers on production and direct materials requirements for Quincy's products. Doug believes that the use of standard costing will allow Quincy to improve cost con- trol and make better operating decisions. Quincy's most popular product is strawberry jam. The jam is produced in 10-gallon batches and each batch requires six quarts of good strawberries. The fresh strawberries are sorted by hand before entering the production process. Because of imperfections in the strawberries and spoilage, one quart of strawberries is discarded for every four quarts of acceptable berries. This

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