Chapter 8, Problem 8.40P

1.

To determine

Pounds Efficiency Variance:

Pounds efficiency variance is the distinction between the actual volumes of pounds failed less the budgeted quantity of pounds failed for a particular level of production.

Hours Variance:

Hours variance is the distinction between the actual rate of hours per pound and budgeted rate of hours per pound multiplied by the actual volume of pounds inspected.

Inverse Efficiency Variance:

Inverse efficiency variance is the distinction between the actual quantity of pounds for an output level and the budgeted quantity of pounds needed for the given output level multiplied by the budgeted rate of time.

To compute: Variances that determine the time spent on inspection was more or less than expected.

2.

To determine

To compute: Variances to evaluate the percentage of the food that fails the inspection.