Which of the following analysis of variances is true? a. Unfavorable sales volume variance means that the actual quantity of units sold is less than the amount of sales at standard quantity. b. A unfavorable sales price variance under the 3-way analysis has a same interpretation with that of the favorable sales price variance under the 4-way analysis. c. A cost price variance that is favorable shows that the current year cost of sales per unit is greater than the prior year cost of sales. d. A favorable volume variance means that the number of units sold as per budget exceed the actual number of units sold.

Which of the following analysis of variances is true? a. Unfavorable sales volume variance means that the actual quantity of units sold is less than the amount of sales at standard quantity. b. A unfavorable sales price variance under the 3-way analysis has a same interpretation with that of the favorable sales price variance under the 4-way analysis. c. A cost price variance that is favorable shows that the current year cost of sales per unit is greater than the prior year cost of sales. d. A favorable volume variance means that the number of units sold as per budget exceed the actual number of units sold.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 6MC: What are some possible reasons for a material price variance? A. substandard material B. labor rate...

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Similar questions

Which of the following statements is false? a. The price factor refers to the change in selling or cost prices assuming there has been no change in units sold. b. The net gross profit variance can be computed by adding the sales price variance and the cost price variance. c. The price-volume factor refers to the sales or cost of sales variances due to the combined effects of the differences in prices and units sold d. The quantity factor refers to the change in the number of units sold assuming there has been no change in the selling or cost prices.
Which of the following statements is false? a. The sum of the cost price variance and cost volume variance is equal to the cost of sales variance. b. The sum of sale mix variance and net gross profit volume variance is equal to the final sales volume variance c. The sum of the price factor and price-quantity factor is equal to the sales price variance. d. The sum of the sales price variance and sales volume variance is equal to the sales variance. e. The sum of the cost factor and price-quantity factor is equal to the cost price variance.
Which 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.
When selling prices and inventory costs are stable, a decrease in units sold would result to _sales volume variance and cost volume variance. A. favorable; favorable C. unfavorable; favorable B. unfavorable; unfavorable D. favorable; unfavorable
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.
Which of the following variances can be derived when the difference of the last year’s selling price and cost of goods sold per units is applied to the difference between the units sold last year and the current year? a. Total Volume Variance b. Sales Volume Variance c. Sales Mix Variance d. Total Gross Profit Variance
Bulldogs Inc. wants to determine the impact of the change in selling price of its sole product in relation to the analysis of its gross profit. Which of the following must the company determine? a. Sales Volume Variance b. Cost Price Variance c. Volume Variance d. Sales Price Variance
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.
Identify the cause of an unfavorable variance in profit. a.Actual labor cost is lower than budget b.Actual sales volume is higher than budget c.Actual material cost is higher than budget d. Actual sales price is higher than budget Explain
Which statement is true? A. Gross profit (GP) variance analysis, is an essential part of financial statements analysis that is used to evaluate the performance of a firm's departments responsible for the firm's line activities (functions). B. Increases and decreases in sales and cost of sales have direct relationship with increases and decreases in GP. C. If there is a negative sales price variance and there is no cost variance, the gross profit variance will be equal to the sales price variance. D. A zero cost variance indicates that there is no difference between the standard cost prices and actual cost prices. E. none of the above
Which statement may not always hold true? A. Increase in the units sold always lead to unfavorable cost volume variance. B. Increase in sales price will always lead to favorable sales variance. C. In a multi-product company, the gross profit volume variance can be further analyzed into sales mix variance and final sales volume variance. D. Decrease in unit production cost will always lead to favorable cost price variance. E. Answer not given
Compute for: 1. Total gross profit variance 2. Sales mix variance 3. Final sales volume variance Note: Indicate if it is favorable or unfavorable