Which of the following statements is incorrect with regards to production variances?   Select one: a. Direct material variances are concerned with both the purchasing and the production functions of a company’s manufacturing operations. b. Use of laborers with high hourly wage rates for production activities requiring low hourly wages rate laborers would result in an unfavorable labor rate variance. c. A favorable direct material price variance would yield a negative number. d. The direct labor rate variance and the direct labor efficiency variance add up to the total direct labor variance. e. The quantity used for a given level of output (standard quantity allowed) is used to determine the direct materials price variance. PreviousSave AnswersNext

Q: An unfavorable fixed overhead volume variance can be due to all of the following except a.employee…

A: The difference between the amount projected for fixed overhead costs based on production volume and…

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A: (a) The main reasons why manufacturing companies are more sensitive to material price variances, as…

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A: Favorable Variance: When the actual costs are lower than the standard, (or when the actual revenue…

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A: Direct material price variance =(Standard rate -Actual rate ) × Actual quantity=($4.80-$4.60) ×…

Q: Hiring of less qualified workers B.An excess of material usage C.Material price increase D.Utilities…

A: Concept introduction: Direct labor Rate variance: this variance shows the difference of standard…

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A: The objective of the question is to understand what a price variance measures in the context of…

Q: Which of the following statements might cause a labor efficiency variance? Statement 1 – Hiring of…

A: Labor efficiency variance is the difference between actual labor hours used to produce a product and…

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A: Volume variance = ( actual production - budgeted production) x Standard fixed factory overhead rate…

Q: Most companies compute the materials price variance when materials are purchased. Group of choices…

A: SOlution: True. This is because Most companies compute the materials price variance when materials…

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Q: Describe the difference between a direct materials efficiency variance and a variable manufacturing…

A: The objective of the question is to understand the difference between a direct materials efficiency…

Q: Which of the following statements might cause a labor rate variance?   Group of choices: Hiring of…

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Q: b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost…

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Q: What makes a variance favorable? Give an example of a favorable variance involving materials. What…

A: What makes a variance favorable? Give an example of a favorable variance involving materials. What…

Q: firm’s production facilities were under-utilized by producing less units of products than budgeted.…

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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.