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Suppose that over the last five years, a company has had the following data for units produced and quantity of direct materials (DMs) used (in
Suppose that over the last five years, a company has had the following data for units produced and quantity of direct materials (DMs) used (in gallons): Year 1 11,658 units 27,746 gallons, Year 2 12,208 units 29,910 gallons, Year 3 12,420 units 28,690 gallons, Year 4 12,899 units. 30,184 gallons Based on this data, what might be an appropriate standard to use for DMs quantity? Briefly discuss how management personnel might address (1) an unfavorable direct materials (DMs) price variance and/or an unfavorable direct labor (DL) usage variance.
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