TB MC Qu. 10-91 Lamar Corporation's... Lamar Corporation's purchasing manager obtained a special price on an aluminum alloy from a new supplier, resulting in a direct-material price variance of $10,700F. The alloy produced more waste than normal, as evidenced by a direct- material quantity variance of $3,500U, and was also difficult to use. This slowed worker efficiency, generating a $4,000U labor efficiency variance. To help remedy the situation, the production manager used senior line employees, which gave rise to a $1,30OU labor rate variance. If overall product quality did not suffer, what variance amount is best used in judging the appropriateness of the purchasing manager's decision to acquire substandard material?

TB MC Qu. 10-91 Lamar Corporation's... Lamar Corporation's purchasing manager obtained a special price on an aluminum alloy from a new supplier, resulting in a direct-material price variance of $10,700F. The alloy produced more waste than normal, as evidenced by a direct- material quantity variance of $3,500U, and was also difficult to use. This slowed worker efficiency, generating a $4,000U labor efficiency variance. To help remedy the situation, the production manager used senior line employees, which gave rise to a $1,30OU labor rate variance. If overall product quality did not suffer, what variance amount is best used in judging the appropriateness of the purchasing manager's decision to acquire substandard material?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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