Wilson is a cost analyst, and he has just received a standard cost report for October...
Wilson is a cost analyst, and he has just received a standard cost report for October 2018. Wilson notes that the report shows a negative variance for materials – the annotation is 2,388 pounds used, 2,154 pounds standard. This illustrates what is called an unfavorable rate variance.
True
False
Homework Answers
False.
The rate variance is the difference between standard rate and actual rate.
When standard rate is more than actual rate the rate variance is Favorable and when standard rate is less than actual rate the variance is unfavorable.
The above annotation illustrates an example of quantity variance. Quantity variance is unfavorable since standard quantity is less than actual quantity.
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Wilson is a cost analyst, and he has just received a standard
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×
Standard Price
=
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3 hours
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