Question
Compute the following variances: Materials Price Variance (AQ X AP) vs (AQ X SP) Materials Quantity Variance. (AQ X SP) vs. (SQ X SP) Labor
- Compute the following variances:
- Materials Price Variance (AQ X AP) vs (AQ X SP)
- Materials Quantity Variance. (AQ X SP) vs. (SQ X SP)
- Labor Rate Variance. (AH X AR) vs (AH X SR)
- Labor Quantity (Efficiency) Variance (AH X SR) vs. (SH X SR)
- Total Overhead Variance (Actual MOH vs Applied MOH).
*Hint: The net of each price/quantity variance for DM and DL should equal your spending variance for each item.
Looking at these variances as a whole, what are some possible explanations as to what caused these variances? (Your answer must include possible explanations for each of the labor/materials variances). What are some things management can do to improve these variances?
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Payroll Accounting 2016
Authors: Bernard J. Bieg, Judith Toland
26th edition
978-1305665910, 1305665910, 1337072648, 978-1337072649
