Suggest One Reason for Each of the Following Variances

Question

Examlex · Accepted Answer

The Answer is a.An unfavorable direct material quantity variance might be caused because not enough material was budgeted,unskilled workers required the use of too much material,machine breakdowns damaged material,or apathetic workers wasted material. b.A favorable direct labor rate variance might occur because the budget used a higher wage rate than reasonable,lower paid workers than expected were assigned to the product,budgeted overtime was not required,or because of a downturn in the economy some payroll benefits included in the budgeted rate were cut. c.A favorable variable overhead spending variance is caused because the actual cost of variable overhead items is less than budgeted.Examples might be indirect labor or indirect material costing less than expected. d.The only reason for an unfavorable fixed overhead volume variance is caused by the production level.If fewer units are produced than budgeted,the variance is unfavorable.

Suggest One Reason for Each of the Following Variances

Definitions: