During february the lungren manufacturing companys costing, Ask an Expert

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During February the Lungren Manufacturing Company's costing system reported several variances that the production manager was surprised to see. Most of the company's monthly variances are under $125, even though they may be either favorable or unfavorable. The following information is for the manufacture of garden gates, its only product:

i. Direct materials price variance, $800 unfavorable.

ii. Direct materials efficiency variance, $1,800 favorable.

iii. Direct manufacturing labor price variance, $4,000 favorable.

iv. Direct manufacturing labor efficiency variance, $600 unfavorable.

Required:

a) Provide the manager with some ideas as to what may have caused the price variances.

b) What may have caused the efficiency variances?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9414141

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