Brunel Ltd employed cheaper quality materials in its production process than originally planned. At the end of the budget period, the business reporte 1. An unfavourable direct materials usage variance 2. An unfavourable direct materials price variance 3. An unfavourable direct labour efficiency variance 4. A favourable sales price variance Which TWO of the above may be explained by the use of cheaper quality materials?

Brunel Ltd employed cheaper quality materials in its production process than originally planned. At the end of the budget period, the business reporte 1. An unfavourable direct materials usage variance 2. An unfavourable direct materials price variance 3. An unfavourable direct labour efficiency variance 4. A favourable sales price variance Which TWO of the above may be explained by the use of cheaper quality materials?

Name: BrunelLtd employed cheaper quality materials in its production proces
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: BrunelLtd employed cheaper quality materials in its production process than originally planned. At the end of the budget period, the business reported:1. An unfavourable direct materials usage variance2. An unfavourable direct materials price varian

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control costs? Please explain. As you are considering the flexible budgeting topic of the week, it is important for you to look at this analysis as a significant contribution to the management of the company. Knowing what the bottom line profit or loss is important. But what is more important is to understand how your actual results varied in terms of units sold versus how the actual cost of each unit differed from the budget.
Top of Form Multiple Choice Theories Choose the best answer. A cost variance of zero indicates that the manufacturing management was * able to control production cost below budgeted costs. unable to keep production costs at budgeted costs even if the purchasing department was able to keep the budgeted price. able to control production costs at budgeted costs. unable to keep production costs at budgeted costs. In gross profit analysis, a favorable cost of sales variance that includes an unfavorable cost volume variance will mean: * The production department was able to control costs within the budget but the purchasing department went over the budget. The purchasing department was able to control costs within the budget but the production department over the budget. The production and purchasing department were able to control costs within the budget. The production and purchasing departments went over the budget. Variance that arises solely because the actual units sold differs from…
Which statement is true? A. Gross profit (GP) variance analysis, is an essential part of financial statements analysis that is used to evaluate the performance of a firm's departments responsible for the firm's line activities (functions). B. Increases and decreases in sales and cost of sales have direct relationship with increases and decreases in GP. C. If there is a negative sales price variance and there is no cost variance, the gross profit variance will be equal to the sales price variance. D. A zero cost variance indicates that there is no difference between the standard cost prices and actual cost prices. E. none of the above
Which of the following statements about fixed overhead variances is FALSE? O The budget variance represents the difference between the original budgeted fixed overhead cost and the applied fixed overhead cost during a period. O An unfavorable volume variance means that a firm's production facilities were under-utilized by producing less units of products than budgeted. O The volume variance is a measure of facility utilization. O Fixed overhead variances consist of a budget variance and a volume variance. Ne: Previous
Rodolfo works at Johnson Incorporated and is tasked with measuring costs. When Rodolfo identifies that actual sales are less than expected sales, what type of variance did Rodolfo identify? A Fixed cost volume variance B Sales price variance C Favorable variance D Unfavorable variance
In the last quarter Company X has sourced a higher grade of material for its main product the Gyro. The material is more expensive than the previous material used but it has been found that significantly less of the new material is needed for each unit of the Gyro produced than the previous material. Which variances would you expect to see in the operating statement of company X for the last quarter? A.An adverse material price variance A favourable material usage variance B.A favourable material price variance An adverse material usage variance C.An adverse material price variance An adverse material usage variance D.A favourable material price variance A favourable material usage variance
A company product has used more material to produce than the standard amount but takes fewer labor hours. Which of the following statements is correct? A.The materials variance is favorable and the labor variance is unfavorable. B.Both the materials and labor variances are unfavorable. C.The materials variance is unfavorable and the labor variance is favorable. D.Both the materials and labor variances are favorable.
None
Describe the difference between a direct materials efficiency variance and a variable manufacturing overhead efficiency variance. OA. A direct materials efficiency variance indicates whether more or less of the chosen allocation base was used than was budgeted for the actual output achieved. A variable manufacturing overhead efficiency variance indicates whether more or less direct materials were used than was budgeted for the actual output achieved. OB. A direct materials efficiency variance indicates whether more or less was paid for direct materials than was budgeted for the actual output achieved. A variable manufacturing overhead efficiency variance indicates whether more or less was paid for the chosen allocation base than was budgeted for the actual output achieved. OC. A direct materials efficiency variance indicates whether more or less direct materials were used than was budgeted for the actual output achieved. A variable manufacturing overhead efficiency variance indicates…
The Provence Company has the following flexible budget variances: unfavorable direct material price variance and favorable direct material quantity variance. A logical explanation for this is: a) They made fewer products than they budgeted for. b) They purchased cheaper material than budgeted. c) All of these choices are logical explanations. d) They purchased higher quality material than budgeted.
ty Variance OF Master Budget (19,200 units) 57,600
A company has set a new policy of acquiring materials from a second hand auction because it is cheaper than market price. Upon further investigations you have discovered that the materials from the auction are lower than the normal standard. How is the new policy likely to impact on the following variances: Material Usage: Choose... Labour Efficiency: Choose... Fixed overhead expenditure: Variable overhead efficiency: Previous page Choose... Choose... Next page