Standard costing

1) Your organisation has just recorded a favourable direct material quantity variance. What are some of the factors that could have caused this variance?

2) Are any of the factors you listed in your answer to (1) likely to impact on the magnitude of the direct material price variance or the direct labour variances? If so, how?

3) An organisation has just recorded an unfavourable total direct labour variance. What are the possible explanations for such a variance and who is responsible for rectifying such a variance?

4) Favourable variances are good news and therefore require no investigation, whereas unfavourable variances are bad news and do require investigation. Do you agree?