OSCM Assignment 9- Material Variances OSCM Assignment 9- Material Variances With

Question

OSCM Assignment 9- Material Variances OSCM Assignment 9- Material Variances Within the manufacturing processes there are differences that occur between what the official Accounting records show for materials used versus what the Production Departments report These differences are referred to as "Material Variances". Variances are a valuable Operations Management tool for measurement, analysis, waste/cost reduction, and control. Terms Inventory Disappearance: Beginning physical inventory, plus receipts, minus ending physical i numbers) tory (official Accounting used, reported by Production Departments to Accounting Disappearance and Reported Production Usage Variance can be eisher unfaverable or favorable. (Think about this.) Note: Variances can be calculated for labor and overhead as well as materials Material Variagce Problem For a given month Konway Kola Kompany produced 93,872 cases of product (24 bottles each case)as-reposted by the Production Departments Empty bottles from official Accounting records: Beginning physical inventory 115 Purchases during the month 2304,000

Explanation / Answer

Explanation

1 Reported production usage 2252928 2 Inventory disappearance* 2320415 3 Empty bottle variance 67487 Empty bottle variance (in percentge of inventory dispapperance) 2.91%

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