Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Textbook Question
Chapter 17, Problem 42P
Industry Volume and Market Share Variances: Missing Data
The following graph is similar to the one presented in Exhibit 17.4. Actual sales volume for the firm is below its budgeted sales volume.
Required
Find the missing amounts:
- a. Actual minus budgeted sales volume.
- b. Budgeted industry volume.
- c. Budgeted market share percent.
- d. Actual market share percent.
- e. Actual industry volume.
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Students have asked these similar questions
Which statement is true?
A. Gross profit (GP) variance analysis, is an essential part of
financial statements analysis that is used to evaluate
the performance of a firm's departments responsible
for the firm's line activities (functions).
B. Increases and decreases in sales and cost of sales have
direct relationship with increases and decreases in GP.
C. If there is a negative sales price variance and there is no
cost variance, the gross profit variance will be equal to the
sales price variance.
D. A zero cost variance indicates that there is no difference
between the standard cost prices and actual cost prices.
E. none of the above
Management Accounting
Question (Qualitative Short Answer)
a. Why is the sales forecast the starting point in budgeting?
b. What is a perpetual budget?
c. Which is a better basis for evaluating actual results: budgeted performance or past performance? Why?
d. The materials price variance can be computed at what two different points in time? Which point is better and why?
e. What effect, if any, would you expect purchasing poor-quality materials to have on direct labor variances?
f. Distinguish between ideal and practical standards.
g. Costs associated with the quality of conformance can be broken down into four broad groups. What are these four groups and how do they differ?
h. What is likely the most effective way to reduce a company's total quality costs?
i. What are the three main uses of quality cost reports?
Which of the following statements is incorrect?
a. Sales volume variance is the amount by which sales would have varied from the base sales if only the sales volume had changed.
b. Sales price variance measures the impact on the firm’s gross profit of changes in the unit selling price.
c. Cost volume variance is the amount by which cost of sales would have varied from the base cost of sales if only the units produced had changed.
d. Cost price variance measures the impact on the firm’s gross profit of changes in the unit cost price or cost of sales.
Chapter 17 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 17 - What complication arises in variance analysis when...Ch. 17 - Variance analysis can be useful in a manufacturing...Ch. 17 - How would you recommend accounting for variances...Ch. 17 - What does a manager learn by computing an industry...Ch. 17 - Why is there no efficiency variance for revenues?Ch. 17 - For what decisions would a manager want to know...Ch. 17 - If the sales activity or materials efficiency...Ch. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - What is the advantage of recognizing materials...
Ch. 17 - How could a professional sports firm use the mix...Ch. 17 - Prob. 12CADQCh. 17 - How could a hospital firm use the mix variance to...Ch. 17 - Prob. 14CADQCh. 17 - There is no reason to investigate favorable...Ch. 17 - Prob. 16CADQCh. 17 - Consider a firm in the sharing economy, such as...Ch. 17 - Prob. 18ECh. 17 - Prob. 19ECh. 17 - Prob. 20ECh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Prob. 22ECh. 17 - Industry Volume and Market Share Variances DB Ice...Ch. 17 - Olive Tree Products sold 72,000 units during the...Ch. 17 - Prob. 25ECh. 17 - Sales Mix and Quantity Variances A-Zone Media...Ch. 17 - Prob. 27ECh. 17 - Sales Mix and Quantity Variances The restaurant at...Ch. 17 - Sales Mix and Quantity Variances Chow-4-Hounds...Ch. 17 - Materials Mix and Yield Variances Stacy, Inc.,...Ch. 17 - Materials Mix and Yield Variances Johns...Ch. 17 - Labor Mix and Yield Variances Matts Eat N Run has...Ch. 17 - Flexible Budgeting, Service Organization KB is a...Ch. 17 - Prob. 34ECh. 17 - Prob. 35ECh. 17 - Sales Price and Activity Variances EZ-Tax is a tax...Ch. 17 - Write a memo to the senior manager of EZ-Tax...Ch. 17 - Variable Cost Variances The standard direct labor...Ch. 17 - Refer to the information in Exercise...Ch. 17 - Prob. 40PCh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Industry Volume and Market Share Variances:...Ch. 17 - Industry Volume and Market Share: Missing Data The...Ch. 17 - Sales Mix and Quantity Variances Lake Cellars...Ch. 17 - Analyze Performance for a Restaurant Dougs Diner...Ch. 17 - Nonmanufacturing Cost Variances FSBCU is a...Ch. 17 - Performance Evaluation in Service Industries Bay...Ch. 17 - Refer to the information in Problem...Ch. 17 - Prob. 49PCh. 17 - Refer to the data for the Peninsula Candy Company...Ch. 17 - Materials Mix and Yield Variances Plano Products...Ch. 17 - Pinnuck Products makes a liquid solvent using two...Ch. 17 - Labor Mix and Yield Variances Matthews Bros, is a...Ch. 17 - Refer to the information in Problem...Ch. 17 - Derive Amounts for Profit Variance Analysis...Ch. 17 - Flexible Budget Oak Hill Township operates a motor...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A flexible budget______. A. predicts estimated revenues and costs at varying levels of production B. gives actual figures for selling price C. gives actual figures for variable and fixed overhead D. is not used in overhead variance calculationsarrow_forwardH1.arrow_forwardWhich of the following about gross profit variance analysis is most correct? a. Results of the gross variance analysis should be published at least annually to improve the company’s transparency. b. All of the choices are correct. c. Gross profit variance analysis is a management tool used to track gross profit and improve its performance and profitability in the future. d. A zero-gross profit variance absolutely indicates that the company is able to sell its products at the same price and at the same volume as budgeted or as previous year’s.arrow_forward
- Gross profit variance analysis can be used to study the effect of: " Changes in cost of goods sold on a company's profitability. O Changes in product sales mix on a company's profitability. Changes in selling prices on a company's profitability. O All of the choices. O Changes in volume of goods sold on a company's profitability.arrow_forwardHow do managers use budgets to control business activities?a) Match the concept (by number) to the correct terminology. 1. Static Budget2. Budget Performance Report3. Variance4. Static Budget Variance5. Flexible Budget6. Flexible Budget Variance7. Sales Volume Variance______ A budget prepared for various levels of sales volume.______ The difference between actual results and the expected results in the flexible budget for the actual units sold. ______ The difference between the expected results in the flexible budget for the actual units soldand the static budget. _____ The difference between actual results and the expected results in the static budget. _____ A report that summarizes the actual results, budgeted amounts, and the differences. _____ A budget prepared for only one level of sales volume. _____ The difference between an actual amount and the budgeted amount; labeled as favorable if it increases operating income and unfavorable if it decreases operating income. In…arrow_forwardMatching terms Match each term to the correct definition.arrow_forward
- Determine the following: Sales price variance Sales volume variance Sales variance Cost price variance Total gross profit variance Price variancearrow_forwardMatch the definition the term. Terms: Cost variance Overhead cost variance Price variance Quantity variance Standard costs Sales budget Production Budget Balanced scorecard Profit center Cost center Definitions: 1. A plan showing the units of goods to be sold and sales to be derived; usually starting pointing the budgeting process. 2. A system of performance measures, including the nonfinancial measures, used to asses manager performance. 3. A department that incurs cost and genrate revenues, such as a selling department 4. The difference between actual and budgeted sales or cost caused by the difference between the actual per unit and the budgeted price per unit. 5. The difference between actual cost and standard cost, made up of a price variance and a quantity variance. 6. The difference between the total overhead cost actually incurred and the total overhead cost applied to products 7. The difference between the actual budgeted cost caused by…arrow_forwardS1: Cost price variance is computed by deducting cost of sales this year at last year's cost price from cost of sales this year. S2: Sales this year at last year's price is the same as sales last year at this year's quantity. A. both are true C. S1 is true D. S2 is true B. both are falsearrow_forward
- 2 no Question Requirement: Compute the following: (i) Material price Purchase variance (ii) Material price usage variance (iii) Material Quantity variance (iv) Material total variance (v) Labor rate variance (vi) Labor efficiency variance (vii) Labor total variance (viii) Variable Spending variance. (ix) Variable Efficiency variance (x) Variable total variancearrow_forwardPRINCIPLE OF HEALTHCARE FINANCEarrow_forward28) In regard to the Sales-Volume Variance, which of the following statements is false. A) The Sales-Volume Variance is commonly caused by external factors such as competitors taking away market share B) The Sales-Volume Variance occurs due to the differing number of units reported as sold in the Fixed Budget and Flexible Budget. C) The Sales-Volume Variance is the difference between the Fixed Budget's Operating Income and the Flexible Budget's Operating Income D) The Sales-Volume Variance is the difference between the Flexible Budget's Operating Income and Actual Results Operating Incomearrow_forward
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY