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GEO Inc has an unfavorable direct materials price variance

GEO Inc. has an unfavorable direct materials price variance.
 

A.

Give two possible reasons for this variance.

 

 

B.

Using one of the above reasons, how could this particular variance affect one of the other variances (ex. direct materials usage, direct labor rate, direct labor efficiency)?

 

 

 

 

 

94. Harkin Ltd. has a $5,000 unfavorable variable overhead spending variance. Give two possible reasons for this variance. 

 

 

95. Drummel Ltd. has a $7,000 unfavorable variable overhead efficiency variance. Give one possible reason for this variance. 

 

 

96. What is "management by exception"? Do you think it represents an efficient use of management time? Why or why not? 

 

97. At the end of the year, your company had the following variances:
 

Direct material price variance

$3,000 F

Direct material usage variance

$3,500 U

Direct labor rate variance

$5,200 U

Direct labor efficiency variance

$7,000 U

 

 


Give at least one possible cause for each of the variances and discuss the possible relationships between them. 

Jan 09 2020 View more View Less

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