Indicate if the following item will affect one or more of the material or labor
ID: 2597966 • Letter: I
Question
Indicate if the following item will affect one or more of the material or labor cost variances. Further, indicate if each such cost variance will be favorable or unfavorable. Your company has recently switched to a new supplier makes delivery at a higher freight rate; however, the parts are significantly better in quality than before, resulting in less breakage of material. Select one or more: a. Farovable material quantity variance b. Unfavorable material quantity variance c. Favorable labor efficiency variance d. Unfavorable labor rate variance e. Favorable labor rate variance f. Unfavorable labor efficiency variance g. unfavorable material price variance h. None of the other responses is applicableExplanation / Answer
A. Favourable Material Quantity variance
g. unfavourable material price variance.
because of increase in frieght charges, actual material cost will increase. so it will be unfavourable for material price variance.
because of less breakage of material, atual quantity using for production will decrease. so it will be favourable for material quantity variance