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Waste on the production line will result in an unfavorable materials price variance.
Materials Price Variance
The difference between the actual cost of materials purchased and the expected cost of materials, adjusted for the actual quantity purchased.
Production Line
An arrangement of machines and workers in a factory where a product passes sequentially from operation to operation until completed.
Waste
Unwanted materials or substances produced by a manufacturing process or during consumption, often associated with inefficiency or environmental harm.
- Identify the determinants of cost variance for materials and labor in the production environment.
- Interpret the implications of variances on material cost and efficiency.
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Learning Objectives
- Identify the determinants of cost variance for materials and labor in the production environment.
- Interpret the implications of variances on material cost and efficiency.
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