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10. LO 8.2When is the material quantity variance favorable? when the actual quantity used is greater...

10. LO 8.2When is the material quantity variance favorable?

  1. when the actual quantity used is greater than the standard quantity
  2. when the actual quantity used is less than the standard quantity
  3. when the actual price paid is greater than the standard price
  4. when the actual price is less than the standard price

12. LO 8.3What are some possible reasons for a labor rate variance?

  1. hiring of less qualified workers
  2. an excess of material usage
  3. material price increase
  4. utilities usage change

14. LO 8.3When is the labor rate variance favorable?

  1. when the actual quantity used is greater than the standard quantity
  2. when the actual quantity used is less than the standard quantity
  3. when the actual price paid is greater than the standard price
  4. when the actual price is less than the standard price

16. LO 8.3When is the direct labor time variance favorable?

  1. when the actual quantity used is greater than the standard quantity
  2. when the actual quantity used is less than the standard quantity
  3. when the actual price paid is greater than the standard price
  4. when the actual price is less than the standard price

Solutions

Expert Solution

Answer 10:

b. when the actual quantity used is less than the standard quantity

Explanation:

Material quantity variance is the difference between standard quantity and actual quantity multiplied by standard rate. It is favorable when actual quantity is less than the standard quantity.

Answer 12:

a. hiring of less qualified workers

Explanation:

When we hire less qualified workers, we pay them low wages. So, there is a difference in labor rate which results in labor rate variance.

Answer 14:

d. when the actual price is less than the standard price

Explanation:

Labor rate variance is favorable when the company pays less wages per hour than expected. So, when the actual price is less than the standard price, it results in a favorable labor rate variance.

Answer 16:

b. when the actual quantity used is less than the standard quantity

Explanation:

Labor time variance (also known as labor efficiency variance) is favorable when actual hours are less than standard hours, which is possible when actual quantity is less than standard quantity.

In case of any doubt, please comment.

ekkarill92 answered 1 year ago
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