Question
Company R has produced the following variance analysis report. If Company R has a policy to investigate variances over 10% of the flexible budget, which
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Company R has produced the following variance analysis report. If Company R has a policy to investigate variances over 10% of the flexible budget, which variances should be investigated?
| Actual | Flexible budget | Budget Variance |
| Price Variance |
| Quantity Variance |
|
DM | $98,240 | $88,000 | $10,240 | U | $1,200 | U | $9,040 | U |
DL | $135,580 | $190,000 | ($54,420) | F | ($18,000) | F | ($36,420) | F |
VOH | $198,860 | $219,000 | ($20,140) | F | ($2,560) | F | ($17,580) | F |
The direct materials price variance and the direct materials quantity variance. | ||
The direct materials quantity variance and the variable overhead efficiency variance. | ||
The direct materials quantity variance and the direct labor efficiency variance. | ||
The direct labor rate variance and the direct labor efficiency variance. |
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