Question: Suppose the direct materials price variance is large and favorable
Suppose the direct materials price variance is large and favorable, and the direct materials efficiency variance is large and unfavorable. What questions would you be likely to ask when investigating these variances further?
Answer to relevant QuestionsWhat is an anchoring bias and how does it affect the process of setting new standards at the end of an accounting period?The managers of Nakatani Enterprises established the following standards for Model 535:Last month, 15,342 units of Model 535 were produced at a cost of $26,870 for direct materials and $47,000 for direct labor. A total of ...Pet Toys, Inc., expected to sell one plush toy for each two chew toys sold. Planned sales and variable costs for last year were as follows:During the year, a competitor came out with a similar plush toy at a lower price. ...Overhead is applied to production based on standard labor hours.REQUIREDFind the values of missing information for letters A through R in the columns for Phi and PhoCompanies.Following is information about Fine Furniture’s direct labor hours and wages last period.Actual labor hours at the standard price per hour .... $1,680Actual labor hours at the actual price per hour ...... 1,752Standard ...
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