Discussion: Utilizing Variance Cal
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a) What are some possible causes for an unfavorable Direct Materials quantity variance?
b) In its most recent budget performance analysis, ABC Company calculated a favorable direct labor price variance during the same period that an unfavorable direct labor quantity variance was recorded. Is it possible that the two variances are related? If so, then how?
c) Briefly describe how to calculate a variable overhead spending variance. Then, describe how a variable overhead efficiency variance is determined.