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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.
How does poor quality materials affect direct labor variance?
If poor quality materials are used it may cause insufficient demand for the products. Insufficient demand may not keep workers busy. If the workers are not being laid off, and unfavorable labor efficiency variance will often be recorded.
What does a debit balance in the labor efficiency variance account indicate?
a debit balance in the labor efficiency variance account indicates that actual rate and actual hours exceed standard rates and standard hours
An unfavorable material quantity variance indicates?
actual usage of materials exceeds the standard material allowed for output
What is a debit note IN accounting terms?
a debit note is an entry recorded to debit an account
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
How does poor quality materials affect direct labor variance?
If poor quality materials are used it may cause insufficient demand for the products. Insufficient demand may not keep workers busy. If the workers are not being laid off, and unfavorable labor efficiency variance will often be recorded.
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 does a debit balance in the labor efficiency variance account indicate?
a debit balance in the labor efficiency variance account indicates that actual rate and actual hours exceed standard rates and standard hours
An unfavorable material quantity variance indicates?
actual usage of materials exceeds the standard material allowed for output
What is a debit note IN accounting terms?
a debit note is an entry recorded to debit an account
Is an increase in expense recorded as a debit or credit on the financial statements?
An increase in expense is recorded as a debit on the financial statements.
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 a positive variance always favorable?
A positive variance is not always favorable; it depends on the context. In financial terms, a positive variance in revenue indicates better-than-expected performance, which is favorable. However, a positive variance in expenses could mean costs are higher than budgeted, which is unfavorable. Thus, assessing whether a positive variance is favorable requires understanding the specific metrics and their implications.
Is a decrease in accounts payable recorded as a debit or credit on the financial statements?
A decrease in accounts payable is recorded as a debit on the financial statements.
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
