For the Quarter Just Ended, Bojangles, Inc

question 6

Essay

For the quarter just ended, Bojangles, Inc. reported the following variances in one of its manufacturing departments:
Material price variance, U
Material quantity variance, F
Labor efficiency variance, F
Labor rate variance, negligible
Machine hours efficiency, F
The sum of the favorable variances exceeded the unfavorable materials price variance by a considerable amount. The quality of the output from the department was the same as usual. Bojangles operates very close to a JIT system for materials purchases, with virtually all material acquired during the quarter being used in manufacturing activities.
Required:
Is there any connection among these variances? If so, explain.

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Definitions:

Rival

In economics, a good or service is considered rival if its consumption by one individual prevents simultaneous consumption by other individuals.

Excludable

Refers to a property of a good or service where it's possible to prevent people who have not paid for it from having access to it.

Efficient Quantity

The amount of a good or service that maximizes the net benefit to society.

Nonrival

A characteristic of a good where one person's consumption does not reduce availability for others.