Which of the following variances would not be investigated by a manager following the management by exception principle? OA 10% unfavorable variance in payroll tax expense OA 10% favorable variance in raw materials price OA 10% unfavorable variance in direct labor rates O An unfavorable variance that has increased by 5% in each of the last five months

Which of the following variances would not be investigated by a manager following the management by exception principle? OA 10% unfavorable variance in payroll tax expense OA 10% favorable variance in raw materials price OA 10% unfavorable variance in direct labor rates O An unfavorable variance that has increased by 5% in each of the last five months

Name: Which of the following variances would not be investigated by a manag
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Which of the following variances would not be investigated by a manager following the management by exception principle?OA 10% unfavorable variance in payroll tax expenseOA 10% favorable variance in raw materials priceA 10% unfavorable variance in d

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: As part of her annual review of her company’s budgets versus actuals, Mary Gerard isolates…

A: Variable overhead cost: The cost fluctuates on the basis of the output level produced. The variable…

Q: Why is it important to do Year over Year (YTD) analysis of Income statement even though a firm is…

A: When conducting financial analysis, it is essential to reflect on both month-over-month trend…

Q: The following data were taken from the records of Griggs Company for December: Administrative…

A: Income statement is the statement showing the net revenue after deducting all the direct as well as…

Q: vnt.85

A: Requirement 2a. Cutoff value = Percentage rate x Standard cost= 5% x $34,000= $1,700Consequently,…

Q: Revenue variances Dickinsen Company gathered the following data for December: Sales price per unit…

A: Variance Analysis examines differences between a company's estimated and actual business…

Q: Identify, by clicking on the relevant boxes in the table below, whether each statement made about…

A: Variance analysis is primarily used by the managers for comparison of actual results with the…

Q: What is the cost volume variance? * Bulldogs Inc. has the following variances in its gross profit…

A: Cost volume variance is one of the useful variance being calculated and used in business. It means…

Q: ) Ehrlich Corporation compares monthly actual operating results to a static budget prepared at the…

A: It is pertinent to note that variable costs are costs that change with the change in the amount of…

Q: DL variances; journal entries Calista & Lane, CPAs, set the following standard for its inventory…

A: ''Since you have posted a question with multiple-parts, we will solve the first three sub-parts for…

Q: With respect to production volume variance, what variables might a manager be able to adjust mid -…

A: Answer:- The term "production volume variance" describes the amount that is added to the standard…

Q: Your managerial accountant has provided you with the following variance report as it relates to…

A: The objective of the question is to identify the qualitative considerations related to the variance…

Q: Investigation of Variances Madison Company uses the following rule to determine whether direct labor…

A: Labor Efficiency variance is comparison between actual hours worked and and standard hours that…

Q: Revenue variances Rockport Industries Inc. gathered the following data for March: Planned Actual…

A: The variance is the difference between the standard and actual cost production data. The variance is…

Q: Highlight F Strikethrough A company sells two products and has calculated the following information…

A: Variance is the deviation which is computed after comparing actual results and standard set for the…

Q: Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds…

A: A budget is a forecast of revenue and expenses for a certain future period of time that is generally…

Q: Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance.…

A: Variances is the amount of difference between the actual values and the values estimated by the…

Q: QUESTION 1 Which one of these statements is FALSE about variance analysis? O In variance analysis,…

A: Note: “Since you have asked multiple questions, we will solve the first question for you. If you…

Q: vnt.iob

A: To solve the problem, we'll need to apply some basic statistical concepts: 1. Cutoff Value for…

Concept explainers

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.

Topic Video

Question

Which of the following variances would not be investigated by a manager following the management by exception principle?
OA 10% unfavorable variance in payroll tax expense
OA 10% favorable variance in raw materials price
A 10% unfavorable variance in direct labor rates
O An unfavorable variance that has increased by 5% in each of the last five months

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Conceptual introduction of variance

VIEW

Step 2: Explain the correct option

VIEW

Step 3: Explain reason for incorrect options

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The calculation of direct labour variances shows a favourable labour rate variance of £2,600 and an adverse labour efficiency variance of £3,200. Which ONE of the following sentences is the best interpretation of this result? C O A. The department has introduced new methods of working and there have been overtime payments to compensate for extra hours of working OB. A machine was not working, leading to idle time for which the employees should not be blamed C. A lower grade of employee has been employed compared with the grade used for the budget, but the employees have taken a longer time to complete the work required D. The union has negotiated higher-than-expected pay increases
Manji
Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control costs? Please explain. As you are considering the flexible budgeting topic of the week, it is important for you to look at this analysis as a significant contribution to the management of the company. Knowing what the bottom line profit or loss is important. But what is more important is to understand how your actual results varied in terms of units sold versus how the actual cost of each unit differed from the budget.
Aaha Inc. produces premium protective automotive covers. The direct materials and direct labour standards for one car cover are as follows: Standard Quantity or Hours Direct materials Direct labour 7.00 metres of cloth 0.30 hours Standard Price or Rate $8 per metre $ 16 per hour Standard Cost $56.00 $4.80 In September, the following activity was recorded: 17,500 metres of cloth were purchased at a cost of $7.50 per metre All of the purchased material was used to produce 2,500 car covers. 520 direct labour-hours were recorded at a total labour cost of $8,320. Required: 1. Compute all direct materials variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (ie., zero variance).) Answer is complete and correct. Direct materials price variance Direct materials quantity variance Total direct material cost variance $ 8,750 F $ $ 8,750 ( 0 None F 000
In analyzing company operations, the controller of the Carson Corporation found a $250,000 favorable flexible budget revenue variance. The variance was calculated by comparing the actual results with the flexible budget. This variance can be wholly explained by: (CMA adapted) Multiple Choice О the total flexible budget variance. О the total static budget variance. О changes in unit selling prices. changes in the number of units sold.
S1: The percentage increase in selling price is found by dividing the favorable sales price variance by last year's sales at the current year's sales quantity. S2: The percentage decrease in units sold is found by dividing the favorable cost volume variance by the planned level of cost of sales. A. both are true C. S1 is true D. S2 is true B. both are false
Revenue variances Rockport Industries Inc. gathered the following data for March: Sales price per unit Number of units of sales Total sales Planned $150 x 12,500 Actual $144 x 12,900 $1,875,000 $1,857,600 Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Compute the revenue price variance. b. Compute the revenue volume variance. $ c. Compute the total revenue variance.
[The following information applies to the questions displayed below.] The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor efficiency variances during the first six months of the current year. January February March. April May June $ 250 F 800 U 700 U 908 U 1,050 U 1,200 U The standard direct-labor cost during each of these months was $19,000. The controller has estimated that the firm's monthly direct-labor variances have a standard deviation of $950. Required: 1-a. Draw a statistical control chart and plot the variance data given above. 1-b. Which variances will be investigated?
Assume that sales quantity variance is $26,560 unfavourable, market share variance is $74,700 unfavourable. Which of the following statements is TRUE? A) Actual market size is lower than budgeted market size. B) Actual market size is higher than budgeted market size. C) Actual market share is higher than budgeted market share. D) None of these answers is correct.