Handley manufacturing company has prepared the following flexible budget for august and is in the process of interpreting the variances. f denotes a favorable variance and u denotes an unfavorable variance. flexible variances budget price efficiency material a $ 50 comma 000 $ 1 comma 100f $ 3 comma 600u material b 69 comma 000 400u 1 comma 100f direct manufacturing labor 87 comma 000 500u 2 comma 900f the most likely explanation of the above variances for material a is that

Answer

The most likely  explanation is that company purchase a lower quality materials. The cost per unit of materials was lower, but more materials were needed.

Explanation:

Material A

favorable price variance

and unfavorable  efficiency variance

The most likely  explanation is that company purchase a lower quality materials. The cost per unit of materials was lower, but more materials were needed.

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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