Question
Lemon Life has produced the following variance analysis report. If Lemon Life has a policy to investigate variances over 10% of the flexible budget, which
Lemon Life has produced the following variance analysis report. If Lemon Life 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 | $324,240 | $298,000 | $26,240 | U | $39,000 | U | ($12,760) | F |
| DL | $215,580 | $300,000 | ($84,420) | F | ($13,000) | F | ($71,420) | F |
| VOH | $231,860 | $249,000 | ($17,140) | F | $2,000 | U | ($19,140) | F |
| The direct labor rate variance and the direct labor efficiency variance. | ||
| The direct materials price variance and the direct labor efficiency variance. | ||
| The direct materials price variance and the variable overhead efficiency variance. | ||
| The direct materials quantity variance and the variable overhead efficiency variance. |
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Financial And Managerial Accounting For MBAs
Authors: Peter D. Easton
6th Edition
9781618533593
