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The analysis-referred to as variance analysis-generally involves decomposing (breaking down) the difference between standard and actual cost into two components. For direct material, the two components are the material price and the material quantity variances. For direct labor, the two components are the labor rate variance and the labor efficiency variance. And for manufacturing overhead, the two components are the overhead volume variance and the controllable overhead variance.
Problem 1: How would you use the variance analysis process as it relates to your future career as a hairdresser/salon owner ?
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