Should the performance of a division be deemed less than satisfactory if all of its variances are“unfavorable”? Explain.

Q: Gauging the Favorableness of Variances When variances occur, they are described as being either…

A: Direct Labor Rate Variance=Budgeted cost for the actual hours worked-Actual cost for the actual…

Q: Which Variable Is most critical in Sensitivity Analysis?

A: Sensitivity analysis helps to analyze the project by considering different variables. It helps…

Q: Why are unfavorable variances recorded by using debitentries and favorable variances recorded by…

A:

Q: Controllability has little to do with whether a cost is fixed or variable.  Select one: True False

A: Fixed cost is the cost that is related to the production of a good or services. It is the amount…

Q: In some cases, a favourable variance can be as bad or worse as an unfavourable variance.

A: Favorable variances (FV) refers to generating more amount of revenue or income from the source than…

Q: Which of the following is FALSE regarding variances? O A favorable variance, when it occurred, are…

A: The method of costing used to determine deviations is referred to as standard costing. The standard…

Q: What is the chief drawback of the high-low method of cost estimation? What problem could an outlier…

A:

Q: “The inspection point is the key to the allocation of spoilage costs.” Do you agree? Explain.

A: Spoilage: Spoilage is the defective item at intermediate or final stage. The spoilage goods cannot…

Q: When is the material quantity unfavorable? A.When the actual quantity used is less than the…

A: Material quantity variance =(AQ-SQ)×SP Where as,  AQ = actual quantity used SQ = standard or…

Q: Is corrective action always necessary when actual costs are higher than standard costs

A: A company which manufactures products and goods keeps a sharp eye on its costs. When the actual cost…

Q: What is the put-call ratio? What is it used for? What are considered high and low values and what do…

A: The question is based on the concept for indicators of the stock market performance. The Put-Call…

Q: How do you decide if the variance is favorable or unfavorable?

A: The discrepancy between budgeted and actual amounts is known as a "variance" in the accounting…

Q: be saved. Assume that every asset has the same expected return and variance. Furthermore, all assets…

A: Variance:It is the measure of deviation value of expected return that varies from the mean position.…

Q: What is the interpretation of the direct-material quantity variance?

A: Direct material quantity variance is a variance analysis tool for manufacturing companies. It shows…

Q: Are the unfavorable variances always bad? Are the favorable variances always good? Why

A: Variance analysis is an important aspect of accounting. In variance analysis we compare the actual…

Q: Which one of the following measures is relevant for assessing exposure to systematic risk?

A: Systematic Risk: It refers to the risk caused by factors that are not in the control of an…

Q: What are the steps in computing the cost of a prediction error when using the EOQ decision model?

A: Economic Order Quantity (EOQ): Economic order quantity is the quantity of order that is purchased…

Q: Calculate the following and determine if variances are favorable

A: Compute the total standard material cost.

Q: In a decision analysis situation, which one of the following costs is generally not relevant to the…

A: Relevant cost is the cost that is different between different alternatives. This cost is considered…

Q: During the control function, the measurements taken of the performance must be accurate enough to…

A: In a corporation, control seems to be a major goal-oriented function of management. This is the…

Q: What are the two primary factors that are difficult to estimate in sensitivity analysis?

A: Answer: Sensitivity analysis is commonly used in determining the interactions in a system or even a…

Q: Stratification of the population generally results in a more efficient sampling plan.   TRUE OR…

A: Auditing means the independent checking of company operation by outsider. Auditor is a qualified and…

Q: xplain the shape of the Markowitz (that is, mean-variance) efficient frontier, specifically what…

A: Markowitz (that is, mean-variance) efficient frontier-It is also known as mean - variance model and…

Q: In two or three paragraphs explain the purpose of variance analysis and its benefits and drawbacks.

A:

Q: n a decision analysis situation, which one of the following costs is generally not relevant to the…

A: Decision making is the process used to choose one of the various available alternatives. Examples of…

Q: Obtaining regression estimates for cost estimation requires establishing the existence of a logical…

A: The objective of the question is to identify the term that is not used to refer to the activities in…

Q: How does Sampling Risk compare to Non-Sampling Risk?

A: Risk:   It is a probability of the financial statements being materially incorrect even though the…

Q: “The direction of a variance (favorable or unfavorable) is irrelevant in decisions regarding…

A: “The direction of a variance (favorable or unfavorable) is irrelevant in decisions regarding is…

Q: Note: Use the minus sign to indicate negative values (when the budgeted amount is greater than the…

A: In the variance analysis, the actual cost incurred, and the standard cost are compared with each…

Q: Distinguish between a favorable variance and an unfavorable variance.

A: Favorable Variance: Favorable variance is the variation in the actual and planned output which is…

Q: Which of the following statements about Least Squares Regression is not true ?   Least -squares…

A: The objective of the question is to identify the incorrect statement about Least Squares Regression…

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.