5 easy accounting questions

A selling price adjustment may need to be implemented when: A) Waste is higher due to inefficient or ineffective employee training. B) Material costs rise due to a market increase that cannot be offset by increased efficiency in the production process. OC) Material costs rise due to a market increase that can be offset by increased efficiency in the production process. OD) None of above The purchasing manager is excited because he found fabric for the tents made by your company at half the price you were paying from your previous vendor. Unfortunately, there seem to be a high number of customer complaints due to the tents leaking. What analysis do you need to do to determine what needs to be done in this situation? OA) Review the complaints, determine quantities of the cheaper product being used, and decide whether to continue with the cheaper fabric or go back to the more costly one. B) Go back to the more expensive fabric. It isn't worth the customer complaints. C) Keep using the inexpensive fabric, since your price variance is favorable. OD) None of above You just reviewed the raw material quantity usage for last month, and see that production used 10% less raw material than the standard quantity budgeted! This is great news, but what might the reason be for this, so you can continue this saving? A) Proper training, great machinery maintenance or quality product purchased. OB) Poor machinery maintenance. C) Purchasing may have gotten a good deal on a lesser quality of product, so it saved us on the spending variance. D) It is probably just a fluke, so I wouldn't anticipate seeing this great news again next period. Analyzing a variance can help a business to: OA) Know when to hire or lay off employees or find lower priced sources for materials. B) Learn whether a variance is significant and if the budget needs to be updated or any improvements need to be made in business operations. C) Learn who is responsible for a budgeting error. D) Learn who should be blamed for unfavorable variances. If your actual unit cost is less than your standard unit cost for raw materials, then your price variance will be: OA) We don't have enough information OB) Favorable OC) Unfavorable OD) Either favorable or unfavorable