Question
1. if the mix of employee's is such that higher skilled, better paid workers are employed than expected: The result would be a favorable direct
1. if the mix of employee's is such that higher skilled, better paid workers are employed than expected:
The result would be a favorable direct labor price (rate) variance because they work can produce more units in the same amount of time | ||
The result would be an unfavorable direct labor price (rate) variance | ||
This would automatically mean that there will be a unfavorable variance for variable manufacturing overhead if manufacturing overhead is based on direct labor | ||
This will result in a favorable direct materials price variance |
2. A direct materials price variance should be computed:
when materiasl were purchased | ||
based upon the amount of materials used in production when only a portion of materials purchased is actually used | ||
when materials are used in production | ||
based upon the difference between the actual quantily of inputs and the standard quantity allowed for output times the standard price |
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