Question: A local business noticed a large variance in both their direct labor and direct materials. They called you in as a consultant to take a

A local business noticed a large variance in both their direct labor and direct materials. They called you in as a consultant to take a look at the variances and help them to understand how it may have happened that they were over budget by

20 %

on both items, but sales had only increased by

10 % .

What might you offer them for reasons for this variance?

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