Question 1

The sales-mix variance is calculated using the budgeted contribution margin per composite unit of the sales mix.

Accepted Answer

A) True 
 B)False

Question 2

The Chair Company manufactures two modular types of chairs;one for the residential market,and the other for the office market.Budgeted and actual operating data for the past year are:
   
The industry volume for residential and office chairs of the type sold by the Chair company had been estimated at 2,400,000.Actual industry volume for the year was 2,200,000 chairs.
Required:
a.Compute the sale-mix variance and the sales- quantity variance by type of chair,and in total.
b.Compute the market-share variance and market-size variances.(Calculate actual and budgeted market share percentages to two decimal places. )

Accepted Answer

Actual sales-mix percentage:
Total volum

Question 3

When the actual mix of products sold shifts in favour of the high-contribution-margin product

Accepted Answer

A) the total sales-mix variance is unfavourable. 
B) the total sales-mix variance is favourable. 
C) the total sales-volume variance is unfavourable. 
D) the total sales-volume variance is favourable. 
E) the total sales volume is more favourable (or less unfavourable). 
A) the total sales-mix variance is unfavourable. 
B) the total sales-mix variance is favourable. 
C) the total sales-volume variance is unfavourable. 
D) the total sales-volume variance is favourable. 
E) the total sales volume is more favourable (or less unfavourable).

Question 4

Which of the following statements is TRUE?

Accepted Answer

A) Managers often find the bar chart presentation to be the most accurate way to analyze customer profitability. 
B) Managers find customer-profitability analysis useful because it frequently highlights how vital a small set of customers is to total profitability. 
C) Managers find customer-profitability analysis useful because when a customer is ranked in the loss category,they can focus their resources on this type of customer. 
D) The 80/20 rule means that 80% of the customers provide 80% of the profit and 20% of the customers provide the remainder. 
E) Managers can ensure that low profitability customers receive high priority. 
A) Managers often find the bar chart presentation to be the most accurate way to analyze customer profitability. 
B) Managers find customer-profitability analysis useful because it frequently highlights how vital a small set of customers is to total profitability. 
C) Managers find customer-profitability analysis useful because when a customer is ranked in the loss category,they can focus their resources on this type of customer. 
D) The 80/20 rule means that 80% of the customers provide 80% of the profit and 20% of the customers provide the remainder. 
E) Managers can ensure that low profitability customers receive high priority.

Question 5

Jung Manufacturing Ltd.manufactures small engine parts.Data for two of the company's customers is as follows:
   
Required:
a.Prepare a comparative income statement in gross margin format with one column for each customer;present customer-specific costs as period expenses.
b.Which customer is relatively more profitable? Support your answer with comparative percentage analysis.

Accepted Answer

@#IMG-DLM& b.On every line ite

Question 6

Use the information below to answer the following question(s).
Special Tea Products (STP)has an exclusive contract with Tea Distributors.Two brands of Teas are imported,Strong and Mild,and sold to retail outlets.The monthly budget for the contract is based on a combination of last year's performance,a forecast of general industry sales,and the company's expected share of the Canadian market for imported Tea.The following information is provided for the month of May:
   Budgeted fixed costs are $1,750.Actual fixed costs are $2,000.
-What is the STP total sales-quantity variance for revenues?

Accepted Answer

A) $0 
B) $150.00 unfavourable 
C) $150.00 favourable 
D) $300.00 unfavourable 
E) $450.00 favourable 
A) $0 
B) $150.00 unfavourable 
C) $150.00 favourable 
D) $300.00 unfavourable 
E) $450.00 favourable

Question 7

The first-ranked product is termed the incremental product in the incremental revenue-allocation method.

Accepted Answer

A) True 
 B)False

Question 8

________ uses product specific information pertaining to products in the bundle to determine the weights used to allocate the bundled revenues to those individual products.

Accepted Answer

A) The stand-alone revenue allocation method 
B) The averaging approach 
C) The incremental revenue allocation method 
D) The joint production costing method 
E) The weighted-averaging approach 
A) The stand-alone revenue allocation method 
B) The averaging approach 
C) The incremental revenue allocation method 
D) The joint production costing method 
E) The weighted-averaging approach

Question 9

Managers find customer-profitability analysis useful because it frequently highlights how vital a small set of customers is to total profitability.

Accepted Answer

A) True 
 B)False

Question 10

Use the information below to answer the following question(s).
John's Video Game Outlet encounters revenue-allocation decisions with its bundled product sales.Here,two or more of the video games are sold as a single package.Managers at John's are keenly interested in individual product-profitability figures.Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows:
   The unit manufacturing costs are $3.60,$4.00,and $5.00 for games A,B,and C,respectively.
-To give more weight to the product that most likely drives the sales of the bundled product,the revenue allocation should be weighted using

Accepted Answer

A) selling prices. 
B) unit costs. 
C) physical units. 
D) stand-alone product revenues. 
E) total product costs. 
A) selling prices. 
B) unit costs. 
C) physical units. 
D) stand-alone product revenues. 
E) total product costs.

Question 11

A difficulty with the market-share and market-size variances is that accurate measures of market share and market size often do not exist.

Accepted Answer

A) True 
 B)False

Question 12

Comment on why marketing managers generally find the market-share variance is more controllable than the market- size variance.

Accepted Answer

Marketing managers generally find the ma

Question 13

Why would a manager perform customer-profitability analysis?

Accepted Answer

Customer profitability analysis highligh

Question 14

Which of the following statements is TRUE?

Accepted Answer

A) Joint product allocation results in more accurate assignment of revenues to products than does revenue allocation. 
B) Revenue allocation results in more accurate assignment of revenues to products than does revenue tracing. 
C) Revenue tracing results in more accurate assignment of revenues to products than does revenue allocation. 
D) Revenue allocation results in more accurate assignment of revenues to products than does joint product allocation. 
E) Joint product allocation results in more accurate assignment of revenues to products than does revenue tracing. 
A) Joint product allocation results in more accurate assignment of revenues to products than does revenue allocation. 
B) Revenue allocation results in more accurate assignment of revenues to products than does revenue tracing. 
C) Revenue tracing results in more accurate assignment of revenues to products than does revenue allocation. 
D) Revenue allocation results in more accurate assignment of revenues to products than does joint product allocation. 
E) Joint product allocation results in more accurate assignment of revenues to products than does revenue tracing.

Question 15

Why would businesses want to sell bundled products? What benefits,if any,are there for the consumer?

Accepted Answer

Businesses seek to sell bundled products

Question 16

Bob's Appliances manufactures industrial dryers and washers.During February the following data are available:
   
Required:
Determine the following:
a.Sales-mix and sales-quantity variances
b.Market-share and market-size variances (for calculation purposes round combined actual and budgeted market share percentages to six decimal places. )

Accepted Answer

The answer of Bob's Appliances manufactures industrial dryers and washers.During...

Question 17

Columbia Coffee Inc.sells two types of coffee,Regular and Decaf.The monthly budget for Canadian coffee sales is based on a combination of last year's performance,a forecast of industry sales,and the company's expected share of the Canadian market.The following information is provided for March:
   
Budgeted fixed costs are $58,000.Actual fixed costs are $62,000.
Required:
Calculate the static-budget,flexible-budget and sales-volume variances for the contribution margin,for the company for March.

Accepted Answer

Static-bud

Question 18

Unfavourable variances reveal not only what occurred but how it occurred.

Accepted Answer

A) True 
 B)False

Question 19

24-hour customer service not traceable to an individual customer is an example of what type of cost?

Accepted Answer

A) corporate-sustaining costs 
B) distribution-channel costs 
C) customer-sustaining costs 
D) customer specific costs 
E) warranty costs 
A) corporate-sustaining costs 
B) distribution-channel costs 
C) customer-sustaining costs 
D) customer specific costs 
E) warranty costs

Question 20

Aromatic Coffee Inc..sells two types of coffee,Colombian and Blue Mountain.The monthly budget for U.S.coffee sales is based on a combination of last year's performance,a forecast of industry sales,and the company's expected share of the U.S.market.The following information is provided for March:
   
Budgeted and actual fixed corporate-sustaining costs are $60,000 and $72,000,respectively.
Required:
a.Calculate the actual total contribution margin for the month.
b.Calculate the total contribution margin for the static budget.
c.Calculate the total contribution margin for the flexible budget.
d.Determine the total static-budget variance,the total flexible-budget variance,and the total sales-volume variance in terms of the contribution margin.

Accepted Answer

The answer of Aromatic Coffee Inc..sells two types of coffee,Colombian...

The sales-mix variance is calculated using the budgeted contribution margin per composite unit of the sales mix.

When the actual mix of products sold shifts in favour of the high-contribution-margin product

Which of the following statements is TRUE?

The first-ranked product is termed the incremental product in the incremental revenue-allocation method.

________ uses product specific information pertaining to products in the bundle to determine the weights used to allocate the bundled revenues to those individual products.

Managers find customer-profitability analysis useful because it frequently highlights how vital a small set of customers is to total profitability.

A difficulty with the market-share and market-size variances is that accurate measures of market share and market size often do not exist.

Comment on why marketing managers generally find the market-share variance is more controllable than the market- size variance.

Why would a manager perform customer-profitability analysis?

Which of the following statements is TRUE?

Why would businesses want to sell bundled products? What benefits,if any,are there for the consumer?

Unfavourable variances reveal not only what occurred but how it occurred.

24-hour customer service not traceable to an individual customer is an example of what type of cost?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 16: Revenue and Customer Profitability Analysis

The sales-mix variance is calculated using the budgeted contribution margin per composite unit of the sales mix.

When the actual mix of products sold shifts in favour of the high-contribution-margin product

Which of the following statements is TRUE?

The first-ranked product is termed the incremental product in the incremental revenue-allocation method.

________ uses product specific information pertaining to products in the bundle to determine the weights used to allocate the bundled revenues to those individual products.

Managers find customer-profitability analysis useful because it frequently highlights how vital a small set of customers is to total profitability.

A difficulty with the market-share and market-size variances is that accurate measures of market share and market size often do not exist.

Comment on why marketing managers generally find the market-share variance is more controllable than the market- size variance.

Why would a manager perform customer-profitability analysis?

Which of the following statements is TRUE?

Why would businesses want to sell bundled products? What benefits,if any,are there for the consumer?

Unfavourable variances reveal not only what occurred but how it occurred.

24-hour customer service not traceable to an individual customer is an example of what type of cost?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters