Causes of variances?

Question 1

Causes of a materials price variance?

Answer 1

A change of supplier

Unexpected change in material price

Question 2

Causes of a materials usage variance?

Answer 2

Quality of materials/equipment affected the amount of materials used
Quality of workforce affected amount of materials used

Question 3

Causes of a labour rate variance?

Answer 3

Availability of skilled/unskilled workers affected the rate of pay
Unexpected pay increase

Question 4

Causes of a Labour efficiency variance?

Answer 4

level of skill of the workers affected number of hours needed to make goods
Quality of materials affected number of hours to make goods

Question 5

Causes of a sales price variance?

Answer 5

A change in the costs of production caused the selling price to be different from expected price
Change in external factors caused selling price to be different from expected price

Question 6

Causes of a sales volume variance?

Answer 6

Change in the selling price affected number of good sold
Internal factors affected number of goods sold
External factors affected number of goods sold