Exam 17: Additional Topics in Variance Analysis

The sales quantity variance is the same as the sales activity variance on a flexible budget performance report.Sales quantity + sales mix = sales activity.

Which of the following statements is (are)true? (A)The market share variance is more controllable by the marketing department than the industry volume variance.(B)The industry volume variance is the portion of the sales activity variance due to a change in the company's proportion of sales in the markets in which they operate.

The labor yield variance is actual total hours at:

Using the abbreviations listed below,what is the formula for the industry volume variance? AMS = actual market share BMS = budgeted market share BCM = budgeted contribution margin per unit ACM = actual contribution margin per unit ATM = actual total market BTM = budgeted total market

Folsom Fashions sells a line of women's dresses.Folsom's performance report for November is shown below: (CMA adapted) The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income. The sales price variance for November is:

Folsom Fashions sells a line of women's dresses.Folsom's performance report for November is shown below: (CMA adapted) The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income. The effect of the sales quantity variance on the contribution margin for November is:

A manufacturer of industrial equipment has a standard costing system based on standard direct labor-hours (DLHs)as the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: What is the predetermined overhead rate to the nearest cent?

The sales quantity variance would be favorable when a company sells:

The Genes Company makes a product,Z,from two materials: X and Y.The standard prices and quantities are as follows: In May,21,000 units of Z were produced by Genes Company,with the following actual prices and quantities of materials used: What is the total direct materials mix variance for May?

Compound K47E is used to make Goforth Corporation's major product.The standard cost of compound K47E is $24.50 per ounce and the standard quantity is 6.1 ounces per unit of output.In the most recent month,5,030 ounces of the compound were used to make 700 units of the output.When recording the use of materials in production,Raw Materials would be:

What is the correct journal entry to record a favorable materials mix variance assuming all material variances are recognized when the direct materials are issued to production?

If variances are not prorated at the end of the accounting period,they are closed to the Cost of Goods Sold.They are being treated as if they are period costs.

When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output,the journal entry would include:

A machine distributor sells two models,basic and deluxe.The following information relates to its master budget. Actual sales were 7,000 basic models and 2,800 deluxe models.The actual sales prices were the same as the budgeted sales prices for both models.What is the sales mix variance for the deluxe model based?

The production cost yield variance is conceptually the same as the sales quantity variance.Both measure expected output given a mix of products versus actual output.

What is the correct journal entry to record direct labor when the actual labor mix is favorable and the total standard hours allowed is greater than the total actual hours worked?

Some variances are the result of accounting errors and omissions,including timing differences.This would make the information less valuable for operating managers.

Folsom Fashions sells a line of women's dresses.Folsom's performance report for November is shown below: (CMA adapted) The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income. What additional information is needed for Folsom to calculate the dollar impact of a change in market share on operating income for November? (CMA adapted)