? What transforms traditional variance analysis intostrategic analysis? [ACCOUNTING]a) Standard costs remain unchangeableb) Pure mathematical calculations drive decisionsc) Market competition factors combine with costcomparisonsd) Historical data becomes the sole focus

Explanation of Variance Analysis: Traditional variance analysis is a management accounting technique…

Answered: What transforms traditional variance…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 8Q: What type of qualitative issues should management consider if a quantitative analysis reveals that a...

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Solution
Which of the following is not a method used by managers to determine cost behavior? High-low Method Scatterplot Account analysis Regression Analysis Derivation
Traditional accounting systems record only actual transac-tions. As a result, how can opportunity costs be important in incremental decisions?
Explain the impact of risk, uncertainty, and changing variables on cost-volume-profit analysis.
Q.Why might an analyst examining variances in the production area look beyond that business function for explanations of those variances?
Which of the following is NOT true of regression techniques for estimating costs? a) They permit the inclusion of more than one predictor. b) They typically use the highest and lowest activity points to estimate the relation between cost and activity. c) They help develop estimates that have a broader base than those based on a few select points. d) They are designed to generate a line that best fits a set of data points.
Which of the following is not one of the main issues regarding data collection which can significantly affect precision and reliability when using regression or any other cost estimation method? Multiple Choice Time period choice. Nonlinearity. Relevant range. Data accuracy.
Which format of the Income Statement is appropriate for financial reporting? O Variable costing O Activity-based O Absorption O any format is fine for financial reporting
Which of the following statements is false? Multiple Choice In general, the term expense is used for managerial purposes, while the term cost refers to external financial reports. An opportunity cost is the benefit forgone by selecting one alternative over another. An outlay cost is a past, present, or future cash outflow. A cost is a sacrifice of resources.
How frequently do you believe that firms should conduct variance analysis? Explain why?
With the aid of computer software, managers can vary assumptions regardingselling prices, costs, and volume and can immediately see the effects of eachchange on the break-even point and profit. Such an analysis is called A. “What if” or sensitivity analysis.B. Vary the data analysis.C. Computer aided analysis.D. Data gathering.
Which of the following is a limitation of the gross profit variance analysis? a. The level of efficiency of asset management department can be computed and shown b. It includes the amount invested in working capital c. Measurement of the impact on gross profit due changes in sales volume cannot be determined d. The gross profit variance analysis is limited only on the product attributable cost

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What transforms traditional variance analysis into strategic analysis? [ACCOUNTING] a) Standard costs remain unchangeable b) Pure mathematical calculations drive decisions c) Market competition factors combine with cost comparisons d) Historical data becomes the sole focus