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An unfavorable activity variance for a cost indicates that spending was higher than it should have been for the actual level of activity for the period true or false?
JulissaC
False
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∙ 12y ago
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An unfavorable material quantity variance indicates?
actual usage of materials exceeds the standard material allowed for output
Why would a favorable price variance for material might be the cause of unfavorable quantity variance?
A favorable/unfavorable price variance does not effect your quantity variance. The reason you would see a favorable price variance and an unfavorable quantity variance is because you consumed more materials than your standard allows AND the price you paid for those material was less than your standard price. If you paid more than your standard price, you would have experienced an unfavorable variance in both quantity and price.
If the controllable overhead variance is favorable the overhead volume variance?
volume variance relates to Fixed cost absorption, where as controllable variances arise due difference in actual variable spending per activity measure.
What does an unfavorable direct labor price variance indicate?
Unfavorrable direct labor price variance indicates that business has incurred more direct labor cost for production of units of product then standard labor cost. For example if standard cost of direct labor for producing 1 unit is 10 and company incurred 105 for making 10 units then extra 5 is unfavorable direct labor cost variance.
Is overhead spending variance affected by excessive usage or waste of overhead materials?
True
An unfavorable material quantity variance indicates?
actual usage of materials exceeds the standard material allowed for output
Why would a favorable price variance for material might be the cause of unfavorable quantity variance?
A favorable/unfavorable price variance does not effect your quantity variance. The reason you would see a favorable price variance and an unfavorable quantity variance is because you consumed more materials than your standard allows AND the price you paid for those material was less than your standard price. If you paid more than your standard price, you would have experienced an unfavorable variance in both quantity and price.
What difference between a favorable variance and an unfavorable variance?
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
The activity variance for revenue is unfavorable if the actual revenue for the period is less than the revenue in the static planning budget true or false?
true
A revenue variance is unfavorable if the actual revenue is less than what the revenue should have been for the actual level of activity for the period true or false?
TRUE
If the controllable overhead variance is favorable the overhead volume variance?
volume variance relates to Fixed cost absorption, where as controllable variances arise due difference in actual variable spending per activity measure.
What does an unfavorable direct labor price variance indicate?
Unfavorrable direct labor price variance indicates that business has incurred more direct labor cost for production of units of product then standard labor cost. For example if standard cost of direct labor for producing 1 unit is 10 and company incurred 105 for making 10 units then extra 5 is unfavorable direct labor cost variance.
What are the variances in a 4 variance analysis?
efficiency variance, spending variance, production volume variance, variable and fixed components
Is the volume variance a controllable variance from a spending point of view?
No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume. No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume.
What type of variance is excess usage?
Since actual usage of the direct material was greater than the standard allowed, the excess usage is called an unfavorable variance
What factors causes Budget Variance?
There are 7 variances associated with a budget ( which are generally calculated for controlling purposes) 1- Material Price variance 2- Material Quantity variance 3- Labor rate variance 4- Labor efficiency variance 5- Spending variance 6- Efficiency variance 7- Capacity variance
Is overhead spending variance affected by excessive usage or waste of overhead materials?
True
