Professional Documents
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Example:
Godrej Manufacturing has developed value-added
standards for its activities among which are the following
three: materials usage, purchasing, and inspecting.
Required:
1. Assume that continuous improvement efforts reduce
the demand for inspection by 30 percent during the year
(actual activity usage drops by 30 percent). Calculate the
activity volume and unused capacity variances for the
inspection activity. Explain their meaning. Also, explain
why there is no activity volume or unused capacity
variance for the other two activities.