It Is Common for Fast Food Restaurants to Use a Particular

question 3

Essay

It is common for fast food restaurants to use a particular species of potato to make their French fries. This species has a characteristic shape and size that fits nicely in the potato cutting machines. They also have the desired taste and color the fast food restaurants, and their patrons, prefer. You can image that potato farming for fast food restaurants is a lucrative business. Given what you know about the Irish Potato Famine, how are fast food restaurants endangering potato crops and farming?

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, valued at standard cost.

Favorable

A term used in variance analysis indicating that actual costs were lower than budgeted or standard costs, leading to higher profits.

Unfavorable

A term used in variance analysis to describe a situation where actual results are worse than expected results, often leading to a negative impact on financial performance.

Raw Materials Price Variance

This variance highlights the difference between the actual cost of raw materials used in production and the standard or expected cost.