CompuWorld sells two products, R66 and R100, and calculates sales variances using the contribution margin. Pertinent data for the current year follow: Budgeted R66 $ 50 40 $ 10 R100 $ 160 90 $ 70 Actual R66 $ 55 43 $ 12 R100 Selling price Variable cost per unit Contribution margin Fixed cost per unit $ 155 95 $ 60 30 25 Operating income $ 4 $ 40 $ 7 $ 35 Sales in units 1,200 400 1,000 1,000 What is the R66 sales quantity variance? R66 sales quantity variance
CompuWorld sells two products, R66 and R100, and calculates sales variances using the contribution margin. Pertinent data for the current year follow: Budgeted R66 $ 50 40 $ 10 R100 $ 160 90 $ 70 Actual R66 $ 55 43 $ 12 R100 Selling price Variable cost per unit Contribution margin Fixed cost per unit $ 155 95 $ 60 30 25 Operating income $ 4 $ 40 $ 7 $ 35 Sales in units 1,200 400 1,000 1,000 What is the R66 sales quantity variance? R66 sales quantity variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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