0
What else can I help you with?
What does a favorable direct materials efficiency variance indicate?
A favorable direct materials efficiency variance indicates that you are using less material in production than was budgeted for.
What are the Causes of direct material quantity variance?
An unfavorable materials quantity variance means excessive use of direct materials. The excessive use of direct materials may be the result of a number of reasons including: inexperienced or untrained workers, lack of motivation, lack of proper supervision, use of outdated machinery, faulty equipment, purchase of unsuitable or substandard materials, and frequent power failures.
Causes of direct material quantity variance?
Some causes of direct material quantity variance are poor quality materials, untrained workers, and lack of supervision. Production managers should look at and determine the causes.
What causes direct labour rate variance?
Direct labor rate variance is caused by a change in the hourly rate from what you initially planned.
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 favorable direct materials efficiency variance indicate?
A favorable direct materials efficiency variance indicates that you are using less material in production than was budgeted for.
what is Direct material variance?
Direct material variance refers to the difference between the actual cost of direct materials used in production and the standard cost that was expected to be incurred. It is typically divided into two components: the price variance, which measures the difference between the actual price paid for materials and the standard price, and the quantity variance, which assesses the difference between the actual quantity of materials used and the standard quantity expected for the actual level of production. Analyzing this variance helps businesses identify inefficiencies and cost management issues in their production processes.
What are the Causes of direct material quantity variance?
An unfavorable materials quantity variance means excessive use of direct materials. The excessive use of direct materials may be the result of a number of reasons including: inexperienced or untrained workers, lack of motivation, lack of proper supervision, use of outdated machinery, faulty equipment, purchase of unsuitable or substandard materials, and frequent power failures.
Causes of direct material quantity variance?
Some causes of direct material quantity variance are poor quality materials, untrained workers, and lack of supervision. Production managers should look at and determine the causes.
Why are variances generally segregated in terms of a price variance and an efficiency variance?
Efficiency Varian materials and direct labor, the variances were recorded in specific general ledger accounts.
Which department is often responsible for the direct materials price variance?
Receiving can affect direct materials price variances if there is no inventory. The accounting department will mark up prices to reflect a shortage.
What causes direct labour rate variance?
Direct labor rate variance is caused by a change in the hourly rate from what you initially planned.
What is material cost variance?
The material cost variance denoting the difference between the standard cost of materials and actual cost of matrials. The material cost variance is between the standard material cost for actual production in units and actual cost. The total cost is usually determined by two differenct factors of influence viz quantity of materials utilized/ required and price of the materials. The fluctuations in the material cost are only due to the fluctuations in the utility of materials due to many factors. Material cost variance can be computed into two different ways: DIRECT METHOD AND INDIRECT METHOD material cost variance= Standard cost of materials for actual output- actual cost of raw materials. MCV=(S Q AO X SP)-(AQ X AP) Indirect Method: material cost variance= Material price variance (MPV)+Material usage Variance
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 is direct labor variance?
It means the difference between the budgeted or estimated direct labour cost at the start of work activity with the actual direct labour cost at the end of activity or fiscal year. If budgeted cost is more then the actuall then it is favourable variance otherwise it is unfavourable direct labour cost variance
What are the causes direct material quantity variance?
what are some of the causes of material quntity variance of favourable amount
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.
