Interaction of materials and labour variances
For the quarter just ended, BoSan Pty Ltd reported the following variances in one of its manufacturing departments:
The sum of the favourable variances above exceeded the unfavourable materials price variance by a considerable amount. The quality of the output from the department was the same as usual. Practically all of the raw material used in this quarter was purchased in this quarter.
Is there any connection between these variances? If so, explain.

Question

Interaction of materials and labour variances
For the quarter just ended, BoSan Pty Ltd reported the following variances in one of its manufacturing departments:

<i>Interaction of materials and labour variances</i> For the quarter just ended, BoSan Pty Ltd reported the following variances in one of its manufacturing departments: The sum of the favourable variances above exceeded the unfavourable materials price variance by a considerable amount. The quality of the output from the department was the same as usual. Practically all of the raw material used in this quarter was purchased in this quarter. Is there any connection between these variances? If so, explain.

The sum of the favourable variances above exceeded the unfavourable materials price variance by a considerable amount. The quality of the output from the department was the same as usual. Practically all of the raw material used in this quarter was purchased in this quarter.
Is there any connection between these variances? If so, explain.

Quizplus · Accepted Answer

The Answer of Interaction of materials and labour variances For the quarter just ended, BoSan Pty Ltd reported the following variances in one of its manufacturing departments: The sum of the favourable variances above exceeded the unfavourable materials price variance by a considerable amount. The quality of the output from the department was the same as usual. Practically all of the raw material used in this quarter was purchased in this quarter. Is there any connection between these variances? If so, explain.

Interaction of Materials and Labour Variances