Assume a peanut butter company reported the following variances in the most recent period. Can you think of a scenario that would explain each combination of variances?

1. Unfavorable direct materials price variance, favorable direct materials usage variance, and unfavorable direct materials spending variance.

2. Favorable direct labor rate variance, unfavorable direct labor efficiency variance, and unfavorable direct labor spending variance.

3. Unfavorable direct labor efficiency variance and unfavorable variable overhead efficiency variance.

4. Favorable fixed overhead spending variance and favorable fixed overhead volume variance.

Answer rating: 100% (QA)

1 Company is buying material at high price might be due to unexpected inflation but using the same v... View the full answer