Required: a. Compute materials price and efficiency variances. b. Compute materials mix and yield variances.

Q: Classify the following costs into either being product cost or period cost:(a) Raw material costs

A: Cost: It can be defined as the total amount that is spent by a business in manufacturing a product.…

Q: Define sales volume variance.

A: Sales volume variance (also known as sales quantity variance) occurs when the actual quantity of…

Q: what are the possible causes of favourable Material usage variance

A: Introduction:- Standard costs are estimates of the actual costs in a company’s production process…

Q: Which do you think is more important for controlling fixed overhead costs: the spending variance or…

A: (This is not a subjective matter of opinion but rather is based on accounting principles and theory…

Q: what are the possible causes of adverse Material usage variance

A: The variation in material consumption is determined as the difference between the quantity of actual…

Q: What is activity base cost management?

A: Activity-based costing commonly referred to as ABC is a part of cost accounting. Cost accounting is…

Q: significant of variance analysis in cost management.

A: Variance analysis is a tool in cost management to compare and analyze variations in budgeted costs…

Q: The standards for direct materials are made up of which of the following components? a.variance…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: Both the equivalent units schedules and the physical flow are prerequisites to calculating the…

A: The question is related to Process Costing. There are two methods of equivalent units  1. FIFO  2.…

Q: What is the overall variance in overhead?

A: Overhead refers to secondary expenditures spent during the manufacturing and distribution of…

Q: how to compute quantity/efficiency variance

A: Cost accounting is beneficial since it can demonstrate where a corporation spends money, earns…

Q: Explain the following concepts: indirect materials Mixed cost Budgeting Margin of safety

A: The total manufacturing cost of the product is determined by including the direct material, labor,…

Q: Explain variable overhead costs.

A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…

Q: Cost information is required for: Select one: O A. Pricing decisions O B. Valuation of inventories O…

A: Cost information means the data and information available relating to the cost of a product or…

Q: Discuss the disadvantages of Absorption Costing for cost control and performance evaluation.

A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…

Q: what are relevent cost of direct material

A: The management of the manufacturing firm has to take certain decisions regarding the…

Q: Explain direct labour efficiency variance.

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: Describe planning for variable overhead costs.

A: Variable Cost: The cost which is not fixed is called a variable cost. This cost is directly…

Q: Explain the term overhead absorption rate and briefly explain how an entity may select a  suitable…

A: In accounting, the term "absorption rate" typically refers to the overhead absorption rate or…

Q: Define direct material variance.

A: Variance:   Variance refers to the difference level in the actual cost incurred and standard cost.…

Q: Explain and describe the overhead variance.

A: Variance means when the actual cost does not match with the estimated costs. To compute the…

Q: Which method is used to see if a relationship between the cost driver and total cost exists?…

A: Cost drivers means activity units that will cause change in total cost for example, number of…

Q: Describe the term cost of the direct materials.

A: Cost:  Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.