Question
Farhan Ullah Aziz has been running an electronics manufacturing business for a long time. The company uses Direct Labor Hours as a cost driver for
Farhan Ullah Aziz has been running an electronics manufacturing business for a long time. The company uses Direct Labor Hours as a cost driver for applying overheads to different products. For the following INDEPENDEDNT situations, identify which variances would likely occur and would they be favorable (write F), unfavorable (write U) or there would be no effect on that variance (write NE). Assume that in every situation, everything else remains constant.
Direct Materials Price Variance F or UF or NE
Direct Materials Quantity Variance F or UF or NE
Labor Rate Variance F or UF or NE
Labor Efficiency Variance F or UF or NE
Variable Overhead Rate Variance F or UF or NE
Variable Overhead Efficiency Variance F or UF or NE
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