Question
Please help with this variance analysis: The next area you have been asked to address for the management team is to help them understand why
Please help with this variance analysis:
The next area you have been asked to address for the management team is to help them understand why the actual costs for the new chair are not aligning with the determined standard costs. The company has set up standard costs for labor and each component of the new chair. It now has the actual costs for the previous month's production run. You are asked to determine which costs are meeting the standards and which are not, to analyze the probable cause of the variances, and to provide a recommendation for moving forward. To determine this, you will conduct a variance analysis.
The Better Chair Company:r produces specialityr chairs which are made of plastic tubing, fabric, and padding. You are tasked With determining quantity.r and price 1urariances for each type of material and rate and ei'ficiencll,r 1urariances for labor. The standards are as follows: Plastic tubing 3 m ete rs at per m eter Fabric 2 square meters at per square meter Padding 3 kilograms at per kilogram Labor 2 hours at per hour Plastic tubing 1,3001} mete rs at . per meter Fabric 1,200 square meters at . per square meter Padding 1,4001} kilograms at . per kilogram Labor LDDD hours at . per hourStep by Step Solution
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