Variance Accounting Analysis
Hi my tutor. I have a question again for you. Could you help me with this assignment.
True/False question:
1. Most companies compute the materials price variance when materials are placed into production.
2. A materials price variance is favorable if the actual price exceeds the standard price.
3. An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.
4. An unfavorable labor rate variance can occur if workers with high hourly wage rates are assigned to work on products whose standards assume workers with low hourly wage rates.
5. If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a favorable labor efficiency variance and unfavorable variable overhead efficiency variance for the same period.
6. A manufacturing cycle efficiency (MCE) ratio of less than 1.00 is desirable since this ratio measures the amount of non-value-added time to throughput time.
7. A favorable materials quantity variance would appear as a debit in a journal entry.
8. When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n) price variance.
9. Poor quality materials could have an unfavorable effect on labor efficiency variance and also materials quantity variance.
10. Excessive number of hours worked in completing job would produce a labor rate variance.
