Chapter 26, Problem 14E

(a)

To determine

Variances: The variances are used to calculate the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference in 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 to as variance report. It shows the difference between actual and estimated financial results

To prepare: Variance report for the purchasing department.

(b)

To determine

To prepare: Variance report of production department.