Delicious Food Products is famous for its frosted fruit cake.The main ingredient of the cake is dried fruit,which Delicious purchases by the pound.In addition,the production requires a certain amount of direct labor.Delicious uses a standard cost system,and at the end of the first quarter,there was a favorable direct materials cost variance.Which of the following is a logical explanation for that variance?
A) The production manager negotiated a lower wage package for production staff, bringing direct labor costs down.
B) The factory lost two experienced workers at the beginning of the quarter, and their replacements worked at a much slower pace during their training period.
C) The purchasing manager was able to secure a volume discount on dried fruit, purchasing the fruit for less than the amount set by standard.
D) The production staff changed the work flow process so that there was less wastage of direct materials during production.
Correct Answer:
Verified
Q81: Unfavorable variances are subtracted from each other
Q82: Favorable and unfavorable variances are subtracted from
Q83: Only unfavorable variances should be investigated,if substantial,to
Q83: Favorable and unfavorable variances are netted together
Q85: Oceanside Marine Company manufactures special metallic materials
Q89: Golden Marine Stores Company manufactures special metallic
Q90: Allen Boating Company manufactures special metallic materials
Q94: When favorable variances are added to unfavorable
Q105: If both favorable and unfavorable variances exist,the
Q110: Managers should look at any variance that
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents