Exam 17: Additional Topics in Variance Analysis

If the number of units produced exceeds the number of units sold,the full-absorption operating profit will be lower than variable costing operating profit.Absorption costing operating profit will be greater since fixed production costs are going into inventory rather than into cost of goods sold.

For a company that produces more than one product,the sales volume variance can be divided into which two of the following additional variances? (CMA adapted)

The Wilbur Company gathered the following information for the year. What is the total sales mix variance?

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 basic model?

The labor mix variance is actual total hours at:

Durrant Corporation has provided the following data concerning its most important raw material,compound O96H: When recording the use of materials in production,Raw Materials would be:

Which of the following income statement items is analyzed using the sales mix and the sales quantity variances?

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 quantity variance for the basic model?

Using the abbreviations listed below,what is the market share 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

Compound Q11H is a raw material used to make Grater Corporation's major product.The standard cost of compound Q11H is $23.00 per ounce and the standard quantity is 3.8 ounces per unit of output.Data concerning the compound for October appear below: The raw material was purchased on account.The credit to the Raw Materials account for October would total:

Which of the following sales variances is further analyzed into the market size and industry volume variances?

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 activity variance for the basic model?

A company makes a product using two materials,one of which is interchangeable with a third material.The standards for producing one 200-pound batch are presented below.The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O.The price of M was $0.03 per pound and the actual price of O was $0.10. What is the materials mix variance?

Labor variances are more important than material variances in service organizations.Labor is a much greater proportion of the inputs than are materials.

Sample Inc.has the following information: What was the standard direct labor rate?

The basic variance analysis framework used for manufacturing companies can also be used in service organizations.The emphasis is more on labor and overhead but the same framework is used.

The next year's budget for Green,Inc. ,a multi-product company,is given below: At the end of the year,the total fixed costs and the variable costs per unit were exactly as budgeted,but the following units per product line were sold.Green analyzes the effects its sales variances have on the profitability of the company. What is the total sales price variance?

Two important characteristics to consider when deciding how many variances to review are how large the variance is and the extent to which the variance can be managed.These are also called impact and controllability.

A credit balance in the labor yield variance implies:

A company makes a product using two materials,one of which is interchangeable with a third material.The standards for producing one 200-pound batch are presented below.The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O.The price of M was $0.03 per pound and the actual price of O was $0.10. What is the materials yield variance?