In performing Variance Analysis for Direct Material costs, the variances include Price and Rate Variances. TRUE FALSE

Q: Why are unfavorable variances recorded by using debitentries and favorable variances recorded by…

A:

Q: Material Cost Variance can be segregated between: a. Mix Variance and Yield Variance b. Usage…

A: solution concept material cost variance material cost variance is divided into material price…

Q: Which of the following is FALSE regarding variances? O A favorable variance, when it occurred, are…

A: The method of costing used to determine deviations is referred to as standard costing. The standard…

Q: What is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Round your…

A: Formula: Direct Labor Rate Variance= (SR-AR)AT Direct Labor Time Variance= (ST-AT)SR Direct Labor…

Q: etermine the following: Total material price variance Total material usage (quantity) variance Labor…

A: Variable overhead refers to the expenses which fluctuate with the change in the number of goods or…

Q: What is the interpretation of the direct-material quantity variance?

A: Direct material quantity variance is a variance analysis tool for manufacturing companies. It shows…

Q: Explain why a favorable sales-quantity variance occurs.

A: Explain the reason for the occurrence of favorable sales quantity variance:When actual sales exceed…

Q: Show how managers can gain insight into the causes of a sales-volume variance by subdividing the…

A: Sales Volume Variance:The sales volume variance is the difference of budgeted amount and the actual…

Q: Give the general formulas for determining cost and efficiency variances.

A: Cost variance: Cost variance shows the difference of standard cost and actual costs. Efficiency…

Q: A variance is the difference between standards and actual performance with materials, labor, or…

A: Variances are used for the performance evaluation of the company. It is also helpful for the…

Q: The difference between actual Cost and standard cost is known as: Variance Profit Differential Cost

A: Standard Cost is the estimated cost expected to be incurred by the company for a particular period…

Q: Create a narrative explanation for the variances. Create a scenario, context, or circumstance that…

A: Variance is the difference between two figures. One figure is the actual and another one is the…

Q: Explain the difference between a favorable and an unfavorable variance.

A: Variance: The term variance is used under standard costing system. Variance is actually the…

Q: Which of the following variances are most similar with respect to the manner in which they are…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Total gross profit variance = Price variance =  Price-Quantity variance =  Cost variance =…

A: Variance is the deviation between actual figures and budgeted figures. If the deviation or change is…

Q: Write in detail the possible causes of each of the following variance.   Direct materials price and…

A: Variances: A cost variance is a difference between the actual expenses incurred and the standard…

Q: A statistical control chart is best used for determining: A. direct-material price variances. B.…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: The direct-material quantity variance is:

A: Direct material quantity variance determines the efficiency of the production department in…

Q: A. Compute the material price and quantity, and the labor rate and efficiency variances. Enter all…

A: Variance refers to the difference that is calculated by taking the actual cost that is incurred in…

Q: Distinguish between a favorable variance and an unfavorable variance.

A: Favorable Variance: Favorable variance is the variation in the actual and planned output which is…

Q: variances

A: Variance means change Variances arise after comparison with standard to Actual.   Types of Variances…

Q: What makes a variance favorable? Give an example of a favorable variance involving materials. What…

A: Variance is the difference in the value of budgeted cost\quantity and the actual cost\quantity. When…

Q: When management uses variance reports to evaluate cost control, they look into which of the…

A: Standard costing means where standard is set for various cost element and actual cost is then…

Q: Compute the direct materials price variance and the direct materials quantity variance. (Inc…

A:

Q: 1. Compute the following variances for May: a. Materials price and quantity variances. b. Labor rate…

A: Since you have asked a question with multiple sub parts, we will solve the first three sub parts…

Q: Required: the variance analysis for labor.

A: 1. Direct labor Variance = (standard rate x Standard hrs for actual output) - (Actual rate x Actual…

Q: The cost price variance is

A: Cost price variance refers to the difference between the actual cost and standard cost of units.…

Q: Which of the following items would be useful to management in deciding whether to investigate the…

A: Standard costs are the budgeted costs related with the production, manufacturing and selling of…

Q: Which of the following set of terms describes the same type of variance?       Price variance, rate…

A: The variance is calculated as difference between the actual results and standard output.

Q: How can the sales-quantity variance be decomposed further?

A: Sales quantity variance identifies the difference between budgeted contribution margin based on…

Q: “Overhead variances should be viewed as interdependent rather than independent.” Give an example.

A: Overhead variance: It refers to that difference amount which is computed by deduction of actual…

Q: Explain why the quantity purchased (PQ) is used in computing the direct-material purchase price…

A: Material Purchase Price Variance: Material price variance occurs when the price expected to purchase…

Q: unfavorable variances result from

A: Unfavorable variance:-It is a result of lower sales, higher expenses, or combination when actual…

Q: The sales price factor shows a variance of

A: Sales price variance is the variance how much the deviation has been made during the year. It means…

Q: Determine the following: a. Total material price variance b. Total material usage (quantity)…

A: d) Calculation of standard hours: It is given that the number of units produced is 850 units and…

Q: a. Direct materials price variance b. Direct materials quantity variance c. Direct materials cost…

A: Material variance is the difference between the actual cost of direct materials and the expected…

Q: (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance…

A: Solution: Direct material quantity variance is also called as direct material usage or efficiency…

Q: a. Break down the material cost variance into different related variances: price variance, usage…

A: Variance analysis: It is the technique in budgeting that allows for analysis of the variances…

Q: Define direct labour variances.

A: Definition: Variance Analysis: Variance analysis is the process of evaluating the differences…

Q: Which of the following variances cannot occur together during the same accounting period? Select…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Comment on the statement “A favourable variance is always better than an adverse variance” by…

A: Variance is the difference between actual numbers and budgeted numbers. Variance can be favourable…

Q: a. Determine the direct materials price variance, direct materials quantity variance, and total…

A: Variances These  are the differences between actual results for actual level of activity and the…

Q: Which of the following is FALSE regarding variances? O A favorable variance, when it occurred, are…

A: Standard costing refers to the method of costing used to find out the variances. Standard overhead…

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.