Management Accounting II: Assignment Presentation
Management Accounting II: Assignment Presentation
Management Accounting II: Assignment Presentation
Assignment Presentation
Controllable:
Purchase of lower quality materials (this will be reflected in adverse material usage variance)
Favorable Material Price Implementation of better procurement practices (e.g. invitation of price quotations from multiple
suppliers)
RM10,000 (F)
Uncontrollable :
A fall in market prices.
Controllable :
Adverse Material Usage Poor management of material.
RM5,000 Purchase lower quality materials (this will be reflected in a favorable material price variance).
Uncontrollable:
Defects in machinery during the process of production.
Reasons caused all the variances
occurred
Direct Labor Cost Variance
Variance Reasons
Controllable:
Employment of skilled people.
Adverse Labor Wage Rate Inefficient hiring by the HR department (overstaff)
RM 2,400 (A) Uncontrollable:
Increase in labor rate.
High demand of labor would push the labor rate upward
Controllable:
Unskilled people
Adverse Labor Efficiency
Use of poor quality of raw materials requiring more time to complete work.
RM 3,600 (A)
Uncontrollable:
Decrease in staff morale and motivation
Reasons caused all the variances
occurred
Fixed Overhead Cost Variance
Variance Reasons
Adverse Fixed Overhead Expenditure Controllable:
Expansion of business undertaken during the period
RM 2, 000 (A)
Uncontrollable:
Increase in cost of services used (eg: rental, insurance premium)
Increase in minimum wage rate > Adverse labor wage rate variance
Unskilled labor > taking more hours > Adverse labor efficiency variance
Employed skilled worker > higher pay > Adverse labor wage rate variance