Data relating to a particular stores item are as follows:Average daily usage
Maximum daily usage
Minimum daily usage
Lead time for replenishment of inventory
Reorder quantityWhat is the reorder level (in units) that avoids inventory stockouts?400 units 520 units 180 units 10 to 15 days 8,000 units
units O
Maximum usage x maximum lead time = 520 x 15 = 7,800 units
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What does an adverse variable overhead efficiency variance indicate and what might be the cause?
Explain briefly the possible causes of
(i) A favourable material usage variance
(ii) A favourable labour rate variance
(iii) An adverse sales volume contribution variance.
What is the relationship between the labour efficiency variance and the variable overhead efficiency variance? Why might the monetary value be different?
Explain the meaning and relevance of interdependence of variances when reporting to managers.
A balanced scorecard measures performance 什om four perspectives: customer satisfaction, growth, financial success and process efficiency. Briefly explain these processes.
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