Mighty Maroons makes decorative railings. This month, the firm's direct labor efficiency variance was $3,840 U. A logical explanation for this variance is: O The firm paid a higher cost for the direct materials than expected. O The firm used more direct materials than expected O The firm paid a higher cost per hour for labor than expected. O The firm used more labor hours than expected.
Mighty Maroons makes decorative railings. This month, the firm's direct labor efficiency variance was $3,840 U. A logical explanation for this variance is: O The firm paid a higher cost for the direct materials than expected. O The firm used more direct materials than expected O The firm paid a higher cost per hour for labor than expected. O The firm used more labor hours than expected.
Chapter1: Financial Statements And Business Decisions
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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.
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Transcribed Image Text:Mighty Maroons makes decorative railings. This month, the firm's direct labor efficiency variance was $3,840 U. A logical explanation for this variance is:
O The firm paid a higher cost for the direct materials than expected.
O The firm used more direct materials than expected
O The firm paid a higher cost per hour for labor than expected.
O The firm used more labor hours than expected.
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