When considering the significance of cost variances, managers should consider al

Question

When considering the significance of cost variances, managers should consider all of the following except the a. size of the variances. b. pattern of recurring variances. c. trends of the variances. d. favorable or unfavorable status of the variances The JIT manufacturer generally does not compute material price variances because a. the purchasing department shops for the lowest price. b. it helps motivate the purchasing department to purchase in large quantities. c. partnering with its suppliers involve long-term contracts d. quantity discounts prevent variances A direct labor efficiency variance cannot be caused by a. inexperienced employees. b. poor quality raw materials. c. employee inefficiency d. an out-of-date labor time standard e. producing fewer finished units than originally planned.

Explanation / Answer

1 When considering the significance of cost variances managers should consider all of the following except the favorable or unfavorable status of variance. 2 The JIT manufacturer generally does not compute material price variances because partnering with its suppliers involve long term contracts. 3 A direct labor efficiency cannot be caused by producing fewer finished goods than originally planned.

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