Which of the following would produce a materials price variance? Select one: a. An excess number of direct labor-hours worked in completing a job. b. Shipping materials to the plant by air freight rather than by truck. c. Breakage of materials in production. d. An excess quantity of materials used.
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.
Which of the following would produce a materials price variance?
An excess number of direct labor-hours worked in completing a job. |
Shipping materials to the plant by air freight rather than by truck. |
Breakage of materials in production. |
An excess quantity of materials used. |
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