A manager has offered various possible causes to explain why an adverse labour efficiency variance has occurred.

Q: What type of cost drivers do modern costing systems use and how does it differ from the cost drivers…

A: Cost Driver Business activities are  influenced by a cost driver . Cost drivers are the factors…

Q: he management wants to know about the cost behaviour and how to classify the cost according to its…

A: Cost behaviour refers to an aspect which helps in indicating the change incurred in costs when there…

Q: Which of the three methods for allocating costs of products can lead to significant product cost…

A: Three methods for allocating cost of product is: 1) Single Plant wide factory overhead rate 2)…

Q: For what purpose should the managerial accountant be careful to not use joint cost allocations?

A: Joint costs: The total costs incurred prior to the split-off point, where the joint products are…

Q: Why do managers consider Direct Coasts to be more accurate than Indirect  Costs?  How do managers…

A: Direct costs are the costs which are directly identifiable in the manufacturing process.  Indirect…

Q: For what decisions is the manager of a cost center not responsible?

A: Responsibility of Cost Centre Manager The main responsibility of the cost center managers to…

Q: If the organization operates at an activity level outside the relevant range, any cost predictions…

A: Answer:-  Relevant range meaning:- The term "relevant range" describes a particular activity level…

Q: Marginal costing can provide useful information for decision-making. However, there are limitations…

A: There are various limitations of marginal costing few of them are stated below.

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: Create an example showing how residual income is calculated. What information is used in computing…

A: Return on investment (ROI):   Return on investment evaluates how efficiently the assets are used in…

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: Which of the following is NOT true about the cause-and-effect criterion when estimating a cost…

A: The cause and effect analysis is one of the factors for making cost allocation decisions. The cost…

Q: Does using cost volume profit sensitivity analysis have any drawbacks or possible negative impacts…

A: Cost volume profit analysis is used to control or monitor a sensitive analysis which depicts changes…

Q: part of a process happen without negatively impacting another part? What are some reasons for erring…

A: Lean methodology eliminates waste to the core in a process and ensures that reduction in delays…

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: Why can full cost accounting lead to wrong management decisions?

A: Full cost accounting says that total costs of the product either it is fixed costs or it is variable…

Q: Critically evaluate the concept and application of marginal costing

A: Concept of marginal costing: Marginal cost is the difference between total costs increasing or…

Q: activity-based costing systems have a tendency to distort product costs. True or False?

A: The overhead is applied to the production on the basis of predetermined overhead rate. The…

Q: As a result of cost distortion, some products will be overcosted while other products will be…

A: Solution: Cost distortions occurs when the overhead costs are not properly allocated,  when 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: Explain why all costs are controllable by someone at some time but in the short run some costs may…

A: Cost accounting: The process of identifying, calculating and recording the cost related to the…

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: In your own words, explain what differential costs mean. How are fixed costs and variable costs…

A: The cost can be classified on the basis of nature variable or fixed. The variable cost are directly…

Q: iable costs change in direct proportion to a change in the activity level. True or False?

A: There are two types of one is fixed cost and other is variable cost and both are part of the total…

Q: criticly identify the possible causes of labour and material variance

A: Labour Variances: 1. Unskilled or inefficient workers. 2. Unfavourable wage rates. 3. Unexpected…

Q: what are the possible causes of favourable Labour efficiency variance

A: The capacity to employ labor in a manner that is consistent with expectations is what the labor…

Q: Why do product-costing systems based on a single, volume-based cost driver tend to over-cost…

A: Single volume-based cost driver means the basis of allocation of costs to particular products using…

Q: What are some possible reasons for a material price variance?

A: The reason for material price variance has been shown below

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.