Managerial Accounting And Quantity Standard

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Managerial Accounting

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Table of Contents
10-1............................................................................................................................................3
10-2............................................................................................................................................3
10-3............................................................................................................................................3
10-5............................................................................................................................................3
10-7............................................................................................................................................3
10-8............................................................................................................................................4
References..................................................................................................................................5

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10-1
The production of one product will require material and the amount of the same is known as
the quantity standard. The price which will be needed to be paid for direct material at a
particular operational level is the price standard.
10-2
The price and quantity variances are calculated in a separate manner due to the delegation of
the responsibilities in an entity. There are different managers who are responsible for them
and due to that the different variances are calculated (Basu and Nair, 2014). With the help of
this, there will be a collection of more information which will be used for the undertaking of
different decisions.
10-3
All the variances which are calculated are the responsibility of different managers and it is
required that they are ascertained. The purchasing manager is the one who is responsible with
respect to material price variance. The production supervisor and managers will be the ones
who will be looking at the labor efficiency and material quantity variances. They all will be
performing their duties to determine the deviations and take corrective actions for them.
10-5
When the price variance is favorable but the quantity variance is unfavourable then it can be
concluded that this is because of the poor quality of the material which has been undertaken
by the company due to its low prices. With the use of that material in the production, there
are negative outcomes that are obtained in respect of the production and that leads to the
unfavourable quantity variances.
10-7
The hiring of labour under the labour contract is not the only aspect that decides the labour
rate variance. There are many other elements that are also required to be considered for the
same. The labour rate variance can also be caused due to the same such as the activities in
which skills are required are provided to the skilled labours and they are paid with the high
rate for their performance (Banerjee, 2019). Due to this the cost increases and an