Highlight F Strikethrough A company sells two products and has calculated the following information relating to sales variances: Sales mix variance $1,000 Sales price variance $200F Sales volume variance = $1,400A There is no indication as to whether the sales mix variance is adverse or favourable but it was caused by a lower proportion of the more profitable item being sold. What is the sales quantity variance? $200 Adverse $400 Adverse $2,400 Adverse $400 Favourable
Highlight F Strikethrough A company sells two products and has calculated the following information relating to sales variances: Sales mix variance $1,000 Sales price variance $200F Sales volume variance = $1,400A There is no indication as to whether the sales mix variance is adverse or favourable but it was caused by a lower proportion of the more profitable item being sold. What is the sales quantity variance? $200 Adverse $400 Adverse $2,400 Adverse $400 Favourable
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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A company sells two products and has calculated the following information relating to sales variances:
Sales mix variance = $1,000
Sales price variance = $200F
Sales volume variance = $1,400A
There is no indication as to whether the sales mix variance is adverse or favourable but it was caused by a lower proportion of the more profitable item being sold.
What is the sales quantity variance?
$200 Adverse
$400 Adverse
$2,400 Adverse
$400 Favourable
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