Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 10, Problem 20MCQ
An unfavorable volume variance can occur because
- a. too much finished goods inventory was held.
- b. the company overproduced.
- c. the actual output was less than expected or practical capacity.
- d. the actual output was greater than expected or practical capacity.
- e. All of these.
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Although there are many reasons to this concern,
one of the general reasons in gross profit variance
analysis why an unfavorable sales volume variance
occur is that the
A. figures are not properly accounted for
B. firm's product is not properly marketed
C. accounts are taking too long to collect.
D. finished product is overpriced
E. raw materials used are overpriced
The unfavorable volume variance may be due to all but which of the following factors? *
Machine breakdown.
Failure to obtain enough sales orders.
Failure to maintain an even flow of work.
Unexpected increases in the cost of utilities.
Although there are many reasons to this concern, one of the general reasons in gross profit variance analysis why an unfavorable sales volume variance occur is that *
a. the company's product is not properly marketed.
b. the finished product is over priced.
c. the figures are not properly accounted for.
d. the accounts are taking too long to collect.
e. the raw materials used are overpriced.
Chapter 10 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 10 - Discuss the dirrerence between budgets and...Ch. 10 - Describe the relationship that unit standards have...Ch. 10 - Why is historical experience often a poor basis...Ch. 10 - Prob. 4DQCh. 10 - Explain why standard costing systems adopted.Ch. 10 - How does standard costing improve the control...Ch. 10 - Discuss the differences among actual costing,...Ch. 10 - Prob. 8DQCh. 10 - The budget variance for variable production costs...Ch. 10 - When should a standard cost variance be...
Ch. 10 - What are control limits, and how are they set?Ch. 10 - Explain why the materials price variance is often...Ch. 10 - The materials usage variance is always the...Ch. 10 - The labor rate variance is never controllable. Do...Ch. 10 - Prob. 15DQCh. 10 - What is kaizen costing? On which part of the value...Ch. 10 - What is target costing? Describe how costs are...Ch. 10 - Prob. 18DQCh. 10 - The variable overhead efficiency variance has...Ch. 10 - Describe the difference between the variable...Ch. 10 - What is the cause of an unfavorable volume...Ch. 10 - Does the volume variance convey any meaningful...Ch. 10 - Which do you think is more important for control...Ch. 10 - Prob. 1MCQCh. 10 - A currently attainable standard is one that a....Ch. 10 - An ideal standard is one that a. uses only...Ch. 10 - The underlying details for the standard cost per...Ch. 10 - The standard quantity of materials allowed is...Ch. 10 - The standard direct labor hours allowed is...Ch. 10 - Investigating variances from standard is a. always...Ch. 10 - Prob. 8MCQCh. 10 - The materials price variance is usually computed...Ch. 10 - Responsibility for the materials usage variance is...Ch. 10 - Responsibility for the labor rate variance...Ch. 10 - Responsibility for the labor efficiency variance...Ch. 10 - (Appendix 10A) Which of the following items...Ch. 10 - (Appendix 10A) Which of the following is true...Ch. 10 - The total variable overhead variance is the...Ch. 10 - A variable overhead spending variance can occur...Ch. 10 - The total variable overhead variance can be...Ch. 10 - The total fixed overhead variance is a. the...Ch. 10 - The total fixed overhead variance can be expressed...Ch. 10 - An unfavorable volume variance can occur because...Ch. 10 - Prob. 21BEACh. 10 - Control Limits During the last 6 weeks, the actual...Ch. 10 - Use the following information to complete Brief...Ch. 10 - Use the following information to complete Brief...Ch. 10 - Use the following information to complete Brief...Ch. 10 - Use the following information to complete Brief...Ch. 10 - Rath Company showed the following information for...Ch. 10 - Variable Overhead Spending and Efficiency...Ch. 10 - Performance Report for Variable Variances Humo...Ch. 10 - Total Fixed Overhead Variance Bradshaw Company...Ch. 10 - Fixed Overhead Spending and Volume Variances,...Ch. 10 - Prob. 32BEBCh. 10 - Control Limits During the last 6 weeks, the actual...Ch. 10 - Prob. 34BEBCh. 10 - Use the following information to complete Brief...Ch. 10 - Use the following information to complete Brief...Ch. 10 - Use the following information to complete Brief...Ch. 10 - Mulliner Company showed the following information...Ch. 10 - Variable Overhead Spending and Efficiency...Ch. 10 - Performance Report for Variable Variances Potter...Ch. 10 - Bulger Company provided the following data:...Ch. 10 - Fixed Overhead Spending and Volume Variances,...Ch. 10 - Standard Quantities of Labor and Materials...Ch. 10 - Sommers Company uses the following rule to...Ch. 10 - Use the following information for Exercises 10-45...Ch. 10 - Refer to the information for Cinturon Corporation...Ch. 10 - Refer to the information for Cinturon Corporation...Ch. 10 - Materials Variances Manzana Company produces apple...Ch. 10 - Labor Variances Verde Company produces wheels for...Ch. 10 - At the beginning of the year, Craig Company had...Ch. 10 - Jackie Iverson was furious. She was about ready to...Ch. 10 - 10-52 Materials and Labor Variances Refer to the...Ch. 10 - Refer to the information for Deporte Company...Ch. 10 - Esteban Products produces instructional aids,...Ch. 10 - Escuchar Products, a producer of DVD players, has...Ch. 10 - Use the following information for Exercises 10-56...Ch. 10 - Refer to the information for Rostand Inc. above....Ch. 10 - At the beginning of the year, Lopez Company had...Ch. 10 - Zepol Company is planning to produce 600,000 power...Ch. 10 - Last year, Gladner Company had planned to produce...Ch. 10 - Anker Company had the data below for its most...Ch. 10 - Cabanarama Inc. designs and manufactures...Ch. 10 - Basuras Waste Disposal Company has a long-term...Ch. 10 - Tom Belford and Tony Sorrentino own a small...Ch. 10 - Mantenga Company provides routine maintenance...Ch. 10 - Buenolorl Company produces a well-known cologne....Ch. 10 - The management of Golding Company has determined...Ch. 10 - Phono Company manufactures a plastic toy cell...Ch. 10 - Botella Company produces plastic bottles. The unit...Ch. 10 - The Lubbock plant of Morrils Small Motor Division...Ch. 10 - Moleno Company produces a single product and uses...Ch. 10 - The Lubbock plant of Morrils Small Motor Division...Ch. 10 - Extrim Company produces monitors. Extrims plant in...Ch. 10 - Lynwood Company produces surge protectors. To help...Ch. 10 - Shumaker Company manufactures a line of high-top...Ch. 10 - Paul Golding and his wife, Nancy, established...Ch. 10 - Prob. 79CCh. 10 - Prob. 1MTCCh. 10 - The Two Cost Systems Sacred Heart Hospital (SHH)...Ch. 10 - Prob. 3MTCCh. 10 - Prob. 4MTCCh. 10 - The Two Cost Systems Sacred Heart Hospital (SHH)...Ch. 10 - Prob. 6MTCCh. 10 - Prob. 7MTCCh. 10 - Prob. 8MTCCh. 10 - Prob. 9MTCCh. 10 - Sacred Heart Hospital (SHH) faces skyrocketing...
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- Which of the following is a possible cause of an unfavorable material quantity variance? A. purchasing substandard material B. hiring higher-quality workers C. paying more than should have for workers D. purchasing too much materialarrow_forwardWhich of the following is a possible cause of an unfavorable labor rate variance? A. hiring too many workers B. hiring higher-quality workers at a higher wage C. making too many units D. purchasing too much materialarrow_forwardIdentify 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 Explainarrow_forward
- 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 givenarrow_forwardWhich 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.arrow_forwardWhen 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; unfavorablearrow_forward
- 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.arrow_forwardWhich of the following is a limitation of the gross profit variance analysis? a. The level of efficiency of asset management department can be computed and shown  b. It includes the amount invested in working capital  c. Measurement of the impact on gross profit due changes in sales volume cannot be determined  d. The gross profit variance analysis is limited only on the product attributable costarrow_forwardWhy should a production-volume variance (PVV) that is material be prorated among work-in-process, finished goods, cost and cost of goods sold rather than writing it all off to cost of goods sold?  a. If a PVV is always written off to cost of goods sold, then the assets on the balance sheet would be the same as actual costs.  b. If a PVV is always written off to cost of goods sold, then the liabilities on the balance sheet would be overstated.  c. If a PVV is always written off to cost of goods sold, then the balances in the inventory accounts on the balance sheet would be most accurate.  d. If a PVV is always written off to cost of goods sold, a company could set its standard costs to either increase or decrease operating incomes.arrow_forward
- An unfavorable fixed overhead volume variance can be due to all of the following except a.employee inexperience b.an increase in utility costs c.machine breakdowns d.sales orders at a low levelarrow_forwardGross profit variance analysis can be used to study the effect of:  a. Changes in cost of goods sold on a company's profitability. b. Changes in selling prices on a company's profitability. c. Changes in volume of goods sold on a company's profitability. d. All of the choices. Changes in product sales mix on a company's profitability.arrow_forwardSales volume variances are attributable to differences between planned and actual activity volumes, as well as differences in selling price. True or Falsearrow_forward
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