Fundamentals of Cost Accounting
5th Edition
ISBN: 9781259565403
Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 17, Problem 21E
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 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.
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?
Gross profit variance analysis can be used to study the effect of:
a. Changes in cost of goods sold on a company's profitability.
b. Changes in selling prices on a company's profitability.
c. Changes in volume of goods sold on a company's profitability.
d. All of the choices.
Changes in product sales mix on a company's profitability.
Chapter 17 Solutions
Fundamentals of Cost Accounting
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 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Industry Volume and Market Share Variances DB Ice...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 A-Zone Media...Ch. 17 - Prob. 24ECh. 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 - Sales Activity Variance, Service Organization...Ch. 17 - Profit Variance Analysis, Service Organization...Ch. 17 - Sales Price and Activity Variances EZ-Tax is a tax...Ch. 17 - Variable Cost Variances The standard direct labor...Ch. 17 - Investigating Variances Refer to the information...Ch. 17 - Variable Cost Variances: Materials Purchased and...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 - Investigating Variances Refer to the information...Ch. 17 - Prob. 42PCh. 17 - Sales Mix and Quantity Variances Refer to the data...Ch. 17 - Materials Mix and Yield Variances Plano Products...Ch. 17 - Labor Mix and Yield Variances Matthews Bros, is a...Ch. 17 - Prob. 46PCh. 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_forwardAssume that sales quantity variance is $26,560 unfavourable, market share variance is $74,700 unfavourable. Which of the following statements is TRUE? A) Actual market size is lower than budgeted market size. B) Actual market size is higher than budgeted market size. C) Actual market share is higher than budgeted market share. D) None of these answers is correct.arrow_forward1) Why do companies develop flexible budgets for variance analysis? Because actual activity level may not be the same as the budgeted activity level. Because flexible budgets reflect the normal production capacity. Because flexible budgets are more accurate than static budgets. Because static budgets become obsolete in the end of year when variance analysis are performed. 2) If excessive direct hours are used in the current operations, what variance would be resulted under the standard cost accounting? Unfavorable labor efficiency variance Favorable labor quality variance Favorable labor efficiency variance Unfavorable labor rate variance 3) The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: Actual Costs Standard Costs Direct Material 4,900 lb. $5.85 per pound 5,000 lb. $5.90 per pound Direct Labor 1,900 hrs. $20.50 per hour 2,000 hrs. $20.00 per hour What is the materials price…arrow_forward
- 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.arrow_forwardTotal operating income variance means the difference between the actul operating inccome and the operating income of the master budget. Operating profit variance only determines the results of operation and excludes financing and other profits and losses. The total operating income variance is also known as sales volume variance which results in difference in the gross profit and difference in booking of other overheads costs due to difference arising in sales and closing inventory values. Questions1. What would be a first-level breakdown of the total operating income variance? 2. How can the total flexible-budget variance be broken down (i.e., what are the constituent parts of this total variance)?arrow_forwardWhich of the following statements is false? a. The sum of the sales volume variance and cost volume variance should be equal to the sum of the sales mix variance and final sales volume variance in a 4-way variance analysis. b. Gross profit variance analysis can be used to assess the effectiveness of the company’s purchasing policies, pricing and mark-up policies. c. There will be a unfavorable sales price variance is the actual sales price is lower than the base sales price. d. There will be a unfavorable cost volume variance if the actual sales volume is less than the base sales volume.arrow_forward
- Match 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_forwardWhich of the following is true? Multiple Choice If a company has an unfavorable spending variance, it must have an unfavorable price variance. If a company has a favorable spending variance, it may have a favorable or unfavorable rate variance. If a company has a favorable quantity variance, it will have a favorable price variance. If a company has an unfavorable efficiency variance, it spent more per labor hour than budgeted.arrow_forwardA flexible budget ( check all that apply): a. Separates variable costs from fixed costs b. Shows reevenues and expenses for varous levels of sales volume c. Reports variable costs on a per unit basis d. Reports fixed costs on a oer unit basisarrow_forward
- 1. Explain the total sales volume variance for a period. How can this total variance be decomposed?2. Explain the meaning of the joint price-quantity variance.arrow_forwardShow transcribed image text 15.What activity variances would Adger report with respect to each of its expenses? (Indicate the effect of each variance by selecting F for favorable, U for unfavorable, and None for no effect (i.e., zero variance). Input all amounts as positive values.) [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.arrow_forwardExplain the following variances. Sales mix variance Sales volume variance Explain the term divisional performance and explain any two common measures of divisional performance.arrow_forward
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