At the end of the year,your company had the following variances:
$\begin{array}{lr}
\text { Direct material price variance } &\$3000\text {F}\
\text { Direct material usage variance } &\$3500\text {U}\
\text {Direct labour rate variance } &\$5200\text {U}\
\text { Direct labour efficiency variance } &\$7000\text {U}\
\end{array}$

Give at least one possible cause for each of the variances and discuss the possible relationships between them.

Question

At the end of the year,your company had the following variances:
$\begin{array}{lr}
  \text { Direct material price variance } &\$3000\text {F}\
 \text { Direct material usage variance } &\$3500\text {U}\
 \text {Direct labour rate variance  } &\$5200\text {U}\
 \text { Direct labour efficiency variance } &\$7000\text {U}\
\end{array}$
 
Give at least one possible cause for each of the variances and discuss the possible relationships between them.

Quizplus · Accepted Answer

The Answer of At the end of the year,your company had the following variances:
$\begin{array}{lr}
  \text { Direct material price variance } &\$3000\text {F}\
 \text { Direct material usage variance } &\$3500\text {U}\
 \text {Direct labour rate variance  } &\$5200\text {U}\
 \text { Direct labour efficiency variance } &\$7000\text {U}\
\end{array}$
 
Give at least one possible cause for each of the variances and discuss the possible relationships between them.

At the End of the Year,your Company Had the Following