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Earn +20 ptsQ: How do you amortize purchase price variance?
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What factors causes Budget Variance?
There are 7 variances associated with a budget ( which are generally calculated for controlling purposes) 1- Material Price variance 2- Material Quantity variance 3- Labor rate variance 4- Labor efficiency variance 5- Spending variance 6- Efficiency variance 7- Capacity variance
Why are variances generally segregated in terms of a price variance and an efficiency variance?
Efficiency Varian materials and direct labor, the variances were recorded in specific general ledger accounts.
When computing standard cost variances the difference between actual and standard price multiplied by actual quantity yields what?
Price Variance
Why a favorable fixed overhead expenditure variance might be reported?
The price variance might result from use of cheaper but inferior quality materials hence though it will be cheaper , the final product will be compromised .
What difference between a favorable variance and an unfavorable variance?
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
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