Saved Bookmarks
| 1. |
Is there a relationship between direct materials variances and direct labor variances? |
| Answer» LET's assume that a lower costing material is purchased in order to ACHIEVE a favorable materials PRICE variance. If the materials have some negative attributes, it is possible that an unfavorable materials usage variance could result. If the materials' attributes cause ADDITIONAL LABOR hours, then an unfavorable direct labor efficiency variance will result. If the materials required more experienced labor, it is possible that a labor rate variance will also occur. | |