Using Variance Analysis in Decision-Making

Next, address the following items in your initial post:

  1. Discuss how managers can apply the use of variance analysis in decision making. When responding to other responses and/or to the discussion forum please consider these additional questions:
  2. Explain what the direct materials price variance and the direct materials efficiency variance measure.
  3. Explain what the direct labor price variance and the direct labor efficiency variances measure.
  4. Discuss what management should do if they discover a favorable or unfavorable variance.