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
1) 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…
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?
Assume 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.
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
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- In comparing actual sales revenue to flexible budget sales revenue, would it be possible to have a favorable variance and still not have met revenue expectations?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_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
- Show 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_forwardYou have asked your sales manager to explain why budgeted revenues for your division are below expectations. The budget indicated $1,039,500 of revenues based on a sales volume of 1,485,000 units. Sales records indicate that 1,500,400 product units were actually sold, but revenues were only $1,020,272. Calculate the sales price variance, the sale volume variance, and the total revenue variance. Sales price variance $ Unfavorable Sales volume variance $ Favorable Total revenue variance $ Unfavorablearrow_forwardBulldogs Inc. wants to analyze the variances in its actual and budgeted gross profit. The following are available:· Actual gross profit and actual gross profit ratio is P600,000 and 25%, respectively.· The actual sales are P400,000 more than the total budgeted sales.· Budgeted sales price at actual quantity sold is P2,000,000What is the Sales Volume Variance under 4-way analysis?arrow_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