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 13CADQ
How could a hospital firm use the mix variance to analyze its revenues?
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Students have asked these similar questions
A company using direct costing in its performance evaluation would normally include the following variance in its report , except
a. Efficiency variance
b. Volume variance
c. Budget variance
d. Price variance
What characteristics of the variance pattern shown in the report should draw the controller’s attention, regardless of the usual investigation rule?
Which of the following is the best reason to also follow up on favorable variances?
Bias in investigation targets and subsequent reports is reduced.
Favorable variances occur more often as activity levels rise.
Production efficiencies may be able to be replicated elsewhere in the organization.
What does the concept of ‘management by exception’ mean and what factors are considered when assessing the significance of a variance?
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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- Cost variances are further investigated for price and efficiency variances because: A) It helps to identify which department managers are responsible for major discrepancies and should find solutions. B) All of the answer choices are correct. C) An unfavorable price variance could be overshadowed by favorable efficiency variance and not investigated for potential corrections. D) It is necessary to find out whether the cost variances are due to price variance or efficiency variance for both and take corrective action accordingly.arrow_forwardAnalyze the variances that you computed in requirements 1 and 2. Was the new service a success from an overall cost-control perspective? Briefly discuss. What seems to have happened that would give rise to customer complaints?arrow_forward1. What is the activity variance for the revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect) 2. What is the spending variance for the cost of ingredients? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effecarrow_forward
- Should both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain your response. What if a company found that they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause(s) of this pattern of variances?arrow_forwardHow do you decide if the variance is favorable or unfavorable?arrow_forwardWhich of the following statements is false? Standard costs (e.g., how much should be paid for each unit of input) are benchmarks for measuring performance. Managers should investigate only unfavorable variances. Variance analysis enhances responsibility accounting. A variance is the difference between the budgeted amount and actual amount.arrow_forward
- Gauging the Favorableness of VariancesWhen variances occur, they are described as being either favorable or unfavorable. When actual activity consumes more time or money than initially planned, an unfavorable variance exists. However, when actual activity consumes less time or money than initially planned, a favorable variance exists. Note that the terms favorable and unfavorable are used, rather than saying that a variance is good or bad, because until the cause of a variance is discovered, it is not clear whether a variance is either good or bad. Note: Use the minus sign to indicate negative values (when the budgeted amount is greater than the actual). If a company calculates that the actual cost for the actual hours worked by employees was $4,300,000, and the amount budgeted for those hours actually worked was $4,800,000, the actual cost for hours worked less the budgeted cost for hours worked is $fill in the blank 53fc32fccfba079_1. This tells you that the actual cost at actual…arrow_forwardWhich of the following statements is false? All material variances, favorable or unfavorable, need to be investigated to determine the cause of the variance. The total budget variance provides sufficient information about the cause of the variance. A budget variance can be further broken down into the quantity and price variances. The quantity variance can be calculated by comparing the total costs under the static and flexible budget. A quantitatively favorable or unfavorable variance might have a different favorability from a qualitative perspective.arrow_forwardWhy do we need to have a "base" for the computation of different types of variances under gross profit analysis?arrow_forward
- please solve and show full work with steps for better understanding Compute the direct materials variance, including its price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.arrow_forwardHow do you find the standard quantity for efficiency variance?arrow_forwardHow can HEB grocery benchmarks be determined when evaluating variances from standard costs.arrow_forward
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