Assume a company purchased direct material at less than its normal price but it was of such poor quality that the workers struggled significantly to make it into the finished product. So to try to make up for some of the time lost, the manufacturing supervisor brought in more senior level workers from another part of the factory. Given these two situations, which of the following variances would likely occur? Multiple Choice O An unfavorable material quantity variance and a favorable material price variance. A favorable material quantity variance and an unfavorable material price variance. A favorable material quantity variance and a favorable labor rate variance. A favorable labor rate variance and an unfavorable labor efficiency variance. A favorable labor efficiency variance and a favorable labor rate variance.
Assume a company purchased direct material at less than its normal price but it was of such poor quality that the workers struggled significantly to make it into the finished product. So to try to make up for some of the time lost, the manufacturing supervisor brought in more senior level workers from another part of the factory. Given these two situations, which of the following variances would likely occur? Multiple Choice O An unfavorable material quantity variance and a favorable material price variance. A favorable material quantity variance and an unfavorable material price variance. A favorable material quantity variance and a favorable labor rate variance. A favorable labor rate variance and an unfavorable labor efficiency variance. A favorable labor efficiency variance and a favorable labor rate variance.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 46E: Refer to the information for Cinturon Corporation on the previous page. Required: 1. Break down the...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Assume a company purchased direct material at less than its normal price but it was of such poor quality that the
workers struggled significantly to make it into the finished product. So to try to make up for some of the time lost, the
manufacturing supervisor brought in more senior level workers from another part of the factory. Given these two
situations, which of the following variances would likely occur?
Multiple Choice
An unfavorable material quantity variance and a favorable material price variance.
A favorable material quantity variance and an unfavorable material price variance.
A favorable material quantity variance and a favorable labor rate variance.
A favorable labor rate variance and an unfavorable labor efficiency variance.
A favorable labor efficiency variance and a favorable labor rate variance.
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