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Determining the Reasons for Variances Is an Important Part of the Overall

Question 164

Matching

Determining the reasons for variances is an important part of the overall process of variance analysis. Certain causes are commonly attributed to specific variances. Match each reason with the variance(s)it commonly creates. Each numbered item has one or more correct answer(s). Each lettered item may be used once, more than once, or not at all.

Premises:
A change in the government-mandated minimum wage
Unanticipated overtime hours
A change in average worker experience or training
A change in the quality of materials purchased
A new supplier contract
Error in the accounting records
Unreasonable standard
Equipment malfunction
Change in proportion of spoiled materials
Responses:
Direct materials price variance
Direct materials efficiency variance
None of the above.
Direct labour efficiency variance.
Direct labour price variance

Correct Answer:

A change in the government-mandated minimum wage
Unanticipated overtime hours
A change in average worker experience or training
A change in the quality of materials purchased
A new supplier contract
Error in the accounting records
Unreasonable standard
Equipment malfunction
Change in proportion of spoiled materials
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