5. Production volume variance: give 1 reason [ VARIANCE CALCULATIONS BELOW] VARI

Question

    5. Production volume variance: give 1 reason

[VARIANCE CALCULATIONS BELOW]

VARIANCE CALCULATIONS

Explain why the following variances that you calculated may occur in full sentences.     1. Direct materials price variance: give 2 possible reasons     2. Direct materials effiency varieance: give 2 possible reasons     3. Direct labor price variance: give 2 possible reasons     4. Direct labor effiency varieance: give 2 possible reasons

    5. Production volume variance: give 1 reason

[VARIANCE CALCULATIONS BELOW]

VARIANCE CALCULATIONS

Actual Input x Budgeted Price Actual Flexible Cost Budget Purchases Usage Enter the fomula to calculate this number. Indicate whether variances are favorable (F) or unfavorable (U) Price Variance Varieance Paterson Awning manufactures awningsand uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The following are the company's cost and standatds data Actual Input xBudgeted Price Actual Flexible Direct Materials Cost Budget Yards per awning Price per yard 22.00 13.00 Direct Labor Hours per awning Rate per hour 5.00 15.00 8.00 6.00 S63,500 Price Variance Variance Variable MOH standard rate per direct labor hour Fixed MOH standard rate per direct labor hour Total budgeted fized MOH cost Flexible Budget Variance Actual cost and data from the current month: Number of yards purchased Cost of yards purchase«d Number of vards used Number of awnings produced Actual direct labor hours Actual direct labor cost Actual variable MOH Actual fited MOH Actual Input Budgeted Price Actual Flexible 51,260 S 661,254 47,500 2,200 10,850 S 168,175 93,310 S 67,500 Cost et Aflocated Spending Variance Varience Flexible Budget Variance

Explanation / Answer

1. Direct materials price variance: give 2 possible reasons:-

2. Direct materials effiency varieance: give 2 possible reasons:-

3. Direct labor price variance: give 2 possible reasons:-

4. Direct labor effiency varieance: give 2 possible reasons

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