Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.