Explain the meaning and relevance of interdependence of variances when reporting to managers.
Interdependence of variances is the term used to describe the situation when there is a single cause of a number of variances.
For example, the use of a higher grade of labour than was anticipated is likely to cause an adverse labour rate variance, a favourable labour efficiency variance, and possibly a favourable material usage variance (due to more experience of working with materials).
It is important that when variances are reported, the possibility that some of them may have a common cause should be acknowledged, and managers encouraged to work together for the benefit of the organisation.
多做幾道
Explain what is meant by standard costing
Explain what is meant by a standard cost
Describe four types of standard.
Explain what is meant by a standard hour.
Give five possible sources of information from which a standard materials price may be estimated.
最新試題
該科目易錯題
該題目相似題
