If the AMD Ryzen 16-Core CPU saves $1,000 per computer manufactured, how would computer manufacturers’ variances be impacted?

AMD is rumored to be releasing a new 16-core, 32 thread CPU, that would be significantly more powerful than its competitors – and it would be about $1,000 less expensive than the closest Intel CPU. This AMD chip is named “AMD Ryzen” and it has six more cores than Intel’s current primary desktop CPU – the Core i7 (technically, the “Core i7-6950x.) (This class of CPUs is for power users; these CPUs are much more powerful than standard desktop CPUs.)

Questions

  1. How, if at all, would the $1,000 cost savings per CPU impact a computer manufacturer’s direct materials price variance in the short run?
  2. How, if at all, would the $1,000 cost savings per CPU impact a computer manufacturer’s direct materials quantity variance in the short run?
  3. What will a computer manufacturer do to its cost standards as a result of this less expensive CPU, assuming it starts using this AMD Ryzen CPU?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.

  • Student handout (pdf) (word) (contains entire blog posting + discussion questions)
  • PowerPoint file (brief article overview + discussion questions)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

About Dr. Wendy Tietz, CPA, CMA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Prentice-Hall.

2 Responses to “If the AMD Ryzen 16-Core CPU saves $1,000 per computer manufactured, how would computer manufacturers’ variances be impacted?”

  1. Hi Wendy;
    First of all – thank you for doing this. I LOVE reading these and I use them in my classes to open up a topic in my accounting classes!

    Secondly I’ll be at TACTYC and am attending one of the sessions that you are leading so I can’t wait to meet you in person.

    Lastly, not sure if you are open to ideas, or even if this one would fit, but I just got done talking about Stockholder’s Equity and how a company is organized CEO – Board – Stockholders, etc.) and then this article on Wells Fargo and the vote for Board of Directors came out in the WSJ. Thought it was perfect and maybe you could put this one in that section in your Accounting in the Headlines?

    https://www.wsj.com/articles/wells-fargo-board-directors-expected-to-be-re-elected-but-vote-is-close-1493126164

    See you later this month!
    julie

    • Dr. Wendy Tietz, CPA, CMA, CGMA Reply May 2, 2017 at 12:47 pm

      Julie:
      Thank you so much for the feedback. I am glad you find my blog helpful.
      Also, I DO appreciate suggestions and I will take a close look at that for a future blog post – thank you so much for the suggestion.
      I look forward to meeting you in a few weeks too! See you then.
      Wendy

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: