Which of the following trends in variances may not indicate an inherent problem?
A)Marketing personnel overstating costs to give themselves additional leeway in operations.
B)Repeatedly having unfavorable labor efficiency variances.
C)An unexpected increase in demand.
D)A developing problem in the manufacturing process.
E)Finding mostly favorable variances over time.

Question

Quizplus · Accepted Answer

An unexpected increase in demand may result in higher production costs, but it is not necessarily an indication of an inherent problem in the manufacturing process or operations. It may instead present an opportunity for the company to increase its revenue and profitability.

Which of the Following Trends in Variances May Not Indicate