The Income Statement of ZZZ Company for the years ended December 31, 2020 and 2021 showed the following data. 2020 2021 800,000 480,000 320,000 924,000 501,600 422,400 220,000 202,400 Net Sales Cost of Sales Gross Margin Operating Expenses Net Income 180,000 140,000 Additional Data: Units Sold 80,000 88,000 Unit Selling Price 10.50 10.00 6.00 Unit Cost 5.70 Analyze if Favorable or Unfavorable. A.) Sales Price Variance = 44,000 F B.) Sales Volume Variance = 80,000 F C.) Sales Variance =124,000 F D.) Cost Price Variance E.) Cost Volume Variance F.) Total Gross Profit Variance G.) Price Variance H.) Price-Quantity Variance I.) Cost Variance J.) Cost-Quantity Variance
The Income Statement of ZZZ Company for the years ended December 31, 2020 and 2021 showed the following data. 2020 2021 800,000 480,000 320,000 924,000 501,600 422,400 220,000 202,400 Net Sales Cost of Sales Gross Margin Operating Expenses Net Income 180,000 140,000 Additional Data: Units Sold 80,000 88,000 Unit Selling Price 10.50 10.00 6.00 Unit Cost 5.70 Analyze if Favorable or Unfavorable. A.) Sales Price Variance = 44,000 F B.) Sales Volume Variance = 80,000 F C.) Sales Variance =124,000 F D.) Cost Price Variance E.) Cost Volume Variance F.) Total Gross Profit Variance G.) Price Variance H.) Price-Quantity Variance I.) Cost Variance J.) Cost-Quantity Variance
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 1MCQ
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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G.) Price Variance
H.) Price-Quantity Variance
I.) Cost Variance
J.) Cost-Quantity Variance
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