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My question stems from not certain on which variance to use for each Question. Please Help me better understand with the questions below. During the
My question stems from not certain on which variance to use for each Question. Please Help me better understand with the questions below.
During the year, the company produced 12,000 units, which was higher than the 10,000 units originally budgeted. The following actual costs were incurred: The company uses a standard costing system to account for manufacturing operations and has noted several specific developments which occurred during the most recent year. For each situation described below, indicate the variance (name) AND the amount which most directly indicates the financial effect that this situation had on the company's profits for the year. Do NOT list any specific variance as the answer to more than one of the questions below. 5. As a result of new machinery maintenance procedures which were put in place, the company experienced a decrease in the amount of wasted materials and scrap during production. (name of variance) (amount and direction) 6. In order to decrease appraisal and internal failure costs, the company experimented with a higher-quality and more costly material than originally planned. 7. During the year, the company used a new factory setup was suggested as part of their value engineering process allowing workers to operate more effectively and produce more units more quickly than expected. During the year, the company produced 12,000 units, which was higher than the 10,000 units originally budgeted. The following actual costs were incurred: The company uses a standard costing system to account for manufacturing operations and has noted several specific developments which occurred during the most recent year. For each situation described below, indicate the variance (name) AND the amount which most directly indicates the financial effect that this situation had on the company's profits for the year. Do NOT list any specific variance as the answer to more than one of the questions below. 5. As a result of new machinery maintenance procedures which were put in place, the company experienced a decrease in the amount of wasted materials and scrap during production. (name of variance) (amount and direction) 6. In order to decrease appraisal and internal failure costs, the company experimented with a higher-quality and more costly material than originally planned. 7. During the year, the company used a new factory setup was suggested as part of their value engineering process allowing workers to operate more effectively and produce more units more quickly than expectedStep by Step Solution
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