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(1) Given the good reputation of the firm?s labour...

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(1) Given the good reputation of the firm?s labour, management is perplexed at the unfavourable efficiency variances which resulted in the period. Taking each of the variances separately under the headings provided in the pro-forma, suggest possible reasons (deriving from the facts provided in the case) that the firm has used more material and more DL hours than it should have. It is likely that for part of your answer a suggested reason may apply to more than one variance. Where this is the case, particular care needs to be taken with your written expression. As for all written expression you must be concise and succinct. Break response into three sections: direct material efficiency variance, direct labour efficiency variance, variable overhead efficiency variance.

 

Paper#5989 | Written in 18-Jul-2015

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