You have the following conversation with Akida Agu, Finance Manager: I have attached the variances, which
Question:
You have the following conversation with Akida Agu, Finance Manager:
I have attached the variances, which have been calculated by one of our Finance Assistants. Reference Material I have also collected
some information regarding some incidents which occurred over the last quarter. They are as follows:
A machine used for the shelling of peanuts developed a fault where a significant quantity of peanuts was lost along with the removed
shells.
The fault was discovered after days, at which point it was estimated that a further days would be needed to complete the repair.
Thus, the machine was idle for days.
After the inventory of shelled peanuts was exhausted, some production employees were idle for days.
The Head of Peanut Butter Production made a decision to form a team of employees to shell the peanuts by hand until the repair was
effected. This was an additional process not usually done by employees.
Whey powder prices in the market have dropped slightly over the last months.
The solar energy generation system was able to generate more electricity than usual due to strong sunlight intensity. Thus, less
energy was purchased from the electricity grid.
Please prepare a report to the SMT which explains:
The potential causes for each of the variances and any linkages between the causes of the variance. Subtask a
College Accounting A Practical Approach
ISBN: 9780135222416
14th Canadian Edition
Authors: Jeffrey Slater, Debra Good