During month-end/quarter-end close, management accountants compute and report several variances including but not limited to sales, wages, production output, cost of goods sold, cost of raw materials and overhead costs variances. Such variances are reported as either favorable or unfavorable to the company’s budget and other non-budgetary performance metrics.

(i) Using an organization you know as an example, discuss two possible causes of variances in the Sales and Wages OR production output budgets in any particular month or quarter.

(ii) Provide some practical solutions to the possible causes you cited.