Question

Loren Company recently purchased materials from a new supplier at a very attractive price. The materials were found to be of poor quality, and the company's laborers struggled significantly as they shaped the materials into finished product. In a desperate move to make up for some of the time lost, the Loren Company manufacturing supervisor brought in more-senior employees from another part of the plant. Which of the following variances would have a high probability of arising from both of these situations?
a. Material quantity variance un vocable
b. Laborrate variance, unvorable
c. Material price variance favorable
d. Labor efficiency variance unfavorable
e. All of the answers are correct

Answer 1

Answer:

Option E. All of the above.

Explanation:

The use of variance analysis by companies occurs in several ways. It usually occur or worked out by the determination of standards against which to actual results cam be liken or compared to. Different companies produce variance reports. The variance analysis is a vital tool for a company or an organization to reach its long-term goals. Variances are computed by taking the difference between Actual cost and standard cost.