Describe If the Production-Volume Variance Is Favourable or Unfavourable for Each

question 103

Essay

Describe if the production-volume variance is favourable or unfavourable for each of the following situations; and, provide the ASPE/IFRS treatment for the disposition of the variance.
1.actual output is less than expected
2.actual output is more than expected but still considered a usual fluctuation
3.actual output is more than expected and is abnormally high

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Definitions:

Computer-Integrated Manufacturing

A method of manufacturing in which the entire production process is controlled by computer.

Flexible Manufacturing Systems

describe highly automated manufacturing processes that can be rapidly adapted to produce different products or product variants, maximizing efficiency and minimizing production times.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate, within an economy or a specific sector.

Steel Manufacturer

A company involved in the production and processing of steel, an alloy of iron and carbon, for various industrial uses.