Variance Analysis
Nova Southeastern University
Wayne Huizenga Graduate School of Business & Entrepreneurship
Assignment for Course: ACT 5060 – Accounting for Decision Makers.
Submitted to: Dr. Wonnell
Submitted by: Daniel Castelblanco N01377525 7975 SW 86 St. Miami, FL 33143 Cell: (786) 546-5408
Date of Submission: September 7, 2012
Title of Assignment: Variance Analysis
CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledge and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Student Signature: ____Daniel Castelblanco______
*******************************************
Instructor’s Grade on Assignment:
Instructor’s Comments:
Variance Analysis
Variance Stated as Variance
(Recycled material)
Materials Price Variance Per ounce price Unfavorable
Materials Quantity Variance Ounce per unit Favorable
(Non-recycled material)
Material Price Variance Price per package Favorable
Material Quantity Variance Usage per unit Unfavorable
Labor Rate Variance Per hour Favorable
Labor Efficiency Variance Time per unit Favorable
1. Explain how the above variances could explain the following:
Scrap Material Decreased (Recycled Material): As long as the material quantity variance drops positive results (favorable) it can be incurred that less material than initially anticipated would be used; resulting in less scrap material.
Returned Orders Increased (Non-recycled material): This issue may be a consequence of lack or poor quality controls during the production process.
Ordering costs for non-recycled materials Increased: This situation will lead price variance to unfavorable grounds, and eventually produce a rise in the cost of the
Wayne Huizenga Graduate School of Business & Entrepreneurship
Assignment for Course: ACT 5060 – Accounting for Decision Makers.
Submitted to: Dr. Wonnell
Submitted by: Daniel Castelblanco N01377525 7975 SW 86 St. Miami, FL 33143 Cell: (786) 546-5408
Date of Submission: September 7, 2012
Title of Assignment: Variance Analysis
CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledge and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Student Signature: ____Daniel Castelblanco______
*******************************************
Instructor’s Grade on Assignment:
Instructor’s Comments:
Variance Analysis
Variance Stated as Variance
(Recycled material)
Materials Price Variance Per ounce price Unfavorable
Materials Quantity Variance Ounce per unit Favorable
(Non-recycled material)
Material Price Variance Price per package Favorable
Material Quantity Variance Usage per unit Unfavorable
Labor Rate Variance Per hour Favorable
Labor Efficiency Variance Time per unit Favorable
1. Explain how the above variances could explain the following:
Scrap Material Decreased (Recycled Material): As long as the material quantity variance drops positive results (favorable) it can be incurred that less material than initially anticipated would be used; resulting in less scrap material.
Returned Orders Increased (Non-recycled material): This issue may be a consequence of lack or poor quality controls during the production process.
Ordering costs for non-recycled materials Increased: This situation will lead price variance to unfavorable grounds, and eventually produce a rise in the cost of the