Question: Theta Manufacturing Scenario: Variance Analysis and Performance Evaluation Data: Theta Manufacturing uses a standard costing system to evaluate performance. For the month of June 2023,

Theta Manufacturing

Scenario: Variance Analysis and Performance Evaluation

Data: Theta Manufacturing uses a standard costing system to evaluate performance. For the month of June 2023, the company reported the following data for its production of electronic components:

Standard Cost per Unit: $80
Actual Production: 10,000 units
Actual Costs Incurred: $850,000
Standard Production: 12,000 units

Requirements: Calculate Theta Manufacturing's direct materials price variance, direct materials quantity variance, direct labor rate variance, and direct labor efficiency variance. Analyze the factors contributing to each variance and their implications for cost control. Discuss how variance analysis can be used to evaluate performance and identify areas for improvement. Evaluate Theta Manufacturing's overall efficiency and effectiveness in cost management based on the variance analysis results. Recommend actions for Theta Manufacturing to improve its cost performance in future production cycles.

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