Question

Which of the following are common causes of favorable variances? a. Producing and selling less units than expected

b. Using less direct materials than expected
c. Using less of a variable resource than expected
d. Taking less time to produce a unit than expected

Answer 1

Favorable variances can occur when there is a difference between the actual and expected results. Common causes of favorable variances include using less direct materials than expected, using less of a variable resource than expected, and taking less time to produce a unit than expected.

Step-by-step explanation:

Favorable variances occur when there is a difference between the actual results and the expected results. In the context of the question, the common causes of favorable variances are:

Using less direct materials than expected: This means that less raw materials were used in the production process, which can lead to lower costs.

Using less of a variable resource than expected: This refers to using less of a resource, such as labor or energy, than what was initially planned. This can also result in cost savings.

Taking less time to produce a unit than expected: When less time is required to produce a unit, it can improve efficiency and reduce costs.