Question: Suppose a plant manager planned to produce 100 units of
Suppose a plant manager planned to produce 100 units of product at a total cost of $1,000. Instead, actual production was 10% higher at 110 units. When costs came in at less than a 10% increase in costs or $1,100, the plant manager claimed that she should get credit for a favorable variance equal to the amount by which the actual costs fell short of $1,100. Comment on this claim.
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