1. The budget variance for variable production costs is broken down into quantity and price variances. Explain why the quantity variance is more useful for control purposes than the price variance.
2. When should a standard cost variance be investigated?
3. What are control limits, and how are they set?
4. Explain why the materials price variance is often computed at the point of purchase rather than at the point of issuance.
5. The materials usage variance is always the responsibility of the production supervisor. Do you agree or disagree? Why?
6. The labor rate variance is never controllable. Do you agree or disagree? Why?
7. Suggest some possible causes of an unfavorable labor efficiency variance.
8. Explain why the variable overhead spending vari- ance is not a pure price variance.