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The trial balance for Vaughn Corporation shows the following for its DM and DL variances at year - end, prior to closing entries. ( b

The trial balance for Vaughn Corporation shows the following for its DM and DL variances at year-end, prior to closing entries. (b)
Assume the company's threshold for determining the materiality of each variance is 5% of its flexible budget cost. Calculate the
significance level of each DM variance in comparison to the DM flexible budget cost. Calculate the significance level of each DL
variance in comparison to the DL flexible budget cost. Compare each variance's significance level to the company's threshold of
5%. Which of these variances (if any) are concerning (i.e., material) to the company? (Round answers to 2 decimal places, e.g.15.25%.)
DM price variance
%
DM efficiency variance
1%
DL price variance
%
DL efficiency variance
eTextbook and Media
Throughout the year, actual purchase costs for DM totaled $230,850; transfers of DM cost into production totaled $233,950. The
total flexible budget DL cost was $190,850 this year.
(a)
Identify whether each total variance above is favorable or unfavorable.
DM price variance
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