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Name: What is the cost volume variance? Bulldogs Inc. had determined the fol
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Description: What is the cost volume variance? Bulldogs Inc. had determined the following variances:Type of VarianceAmountAnalysisSales Price Variance4,000FavorableCost Volume Variance, 4-wayCost Price Variance, 3-way3,500Unfavorable2,500UnfavorableVolume Varianc

Business

Accounting

Type of Variance Amount Analysis Sales Price Variance 4,000 Favorable Cost Volume Variance, 4-way 3,500 Unfavorable Cost Price Variance, 3-way 2,500 Unfavorable Volume Variance 1,000 Favorable

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 22E

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Concept explainers

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.

Topic Video

Question

What is the cost volume variance?

Bulldogs Inc. had determined the following variances:
Type of Variance
Amount
Analysis
Sales Price Variance
4,000
Favorable
Cost Volume Variance, 4-way
Cost Price Variance, 3-way
3,500
Unfavorable
2,500
Unfavorable
Volume Variance
1,000
Favorable

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