Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 15, Problem 12Q
9. Minnie Divers, the manager of the marketing department for one of the industry’s leading retail businesses, has been notified by the accounting department that her department experienced an unfavorable sales volume variance in the preceding period but a favorable sales price variance. Based on these contradictory results, how would you interpret her overall performance as suggested by her variances?
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Which of the following about gross profit variance analysis is most correct?
a. Results of the gross variance analysis should be published at least annually to improve the company’s transparency.
b. All of the choices are correct.
c. Gross profit variance analysis is a management tool used to track gross profit and improve its performance and profitability in the future.
d. A zero-gross profit variance absolutely indicates that the company is able to sell its products at the same price and at the same volume as budgeted or as previous year’s.
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.
ty Variance
OF
Master
Budget
(19,200 units)
57,600
Chapter 15 Solutions
Survey Of Accounting
Ch. 15 - 1. Pam Kelly says she has no faith in budgets. Her...Ch. 15 - 7. What is a responsibility center?Ch. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - Prob. 5QCh. 15 - 3. When are sales and cost variances favorable and...Ch. 15 - 4. Joan Mason, the marketing manager for a large...Ch. 15 - Prob. 8QCh. 15 - Prob. 9QCh. 15 - Prob. 10Q
Ch. 15 - Prob. 11QCh. 15 - 9. Minnie Divers, the manager of the marketing...Ch. 15 - 6. How do responsibility reports promote the...Ch. 15 - Prob. 14QCh. 15 - Prob. 15QCh. 15 - Prob. 16QCh. 15 - 12. How can a residual income approach to...Ch. 15 - Prob. 18QCh. 15 - Exercise 9-6A Evaluating a profit center Helen...Ch. 15 - Prob. 2ECh. 15 - Prob. 3ECh. 15 - Prob. 4ECh. 15 - Exercise 8-3A Determining amount and type...Ch. 15 - Prob. 6ECh. 15 - Exercise 8-4A Determining sales and variable cost...Ch. 15 - Exercise 8-5A Determining flexible budget...Ch. 15 - Exercise 8-9A Responsibility for the fixed cost...Ch. 15 - Prob. 10ECh. 15 - Exercise 8-7A Evaluating a decision to increase...Ch. 15 - Prob. 12ECh. 15 - Prob. 13ECh. 15 - Exercise 9-9A Residual income Climax Corporation...Ch. 15 - Residual income Gletchen Cough Drops operates two...Ch. 15 - Prob. 16ECh. 15 - Prob. 17ECh. 15 - Prob. 18PCh. 15 - Prob. 19PCh. 15 - Prob. 20PCh. 15 - Prob. 21PCh. 15 - Problem 9-20A Return on investment Sorrento...Ch. 15 - Problem 9-21A Comparing return on investment and...Ch. 15 - Comparing return on investment and residual income...Ch. 15 - ATC 8-1 Business Applications Case Static versus...Ch. 15 - Prob. 2ATCCh. 15 - Prob. 3ATCCh. 15 - ATC 9-1 Business Applications Case Analyzing...Ch. 15 - Prob. 5ATC
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- 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.arrow_forwardWhich 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 abovearrow_forwardIn response to poor sales, the sales manager of TJG Ltd has changed the pricing strategy to try and improve revenues and profits. As a result, the operating statement at the end of the period shows the following: Sales price variance: £13,000 Adverse Sales volume variance: £14,000 Favourable Sales quantity variance: E5,000 Favourable Which of the explanations below fits these variances? O Costs will have decreased given volumes have reduced. O Customers chose a less profitable mix than the budget anticipated. A price reduction may have driven an overall increase in contribution. O Prices have increased as the price variance is adverse.arrow_forward
- Using the accompanying data of restaurant sales, determine if the variance of weekday sales is the same as that of weekend sales for each of the three variables (lunch, dinner, and delivery). Click the icon to view the restaurant sales data. Is there sufficient evidence at the 0.01 level of significance to conclude that the variance of weekday sales is the same as that of weekend sales for lunch sales? Determine the null hypothesis, H. and the alternative hypothesis, H,. Let weekend sales be population 1 and weekday sales be population 2. Ho 61 2 2 Ho H. 0 (Type integers or decimals. Do not round. Survey data X Date Day Lunch Sales $ Dinner Sales $ Delivery Sales $ Compute the test statistic. 4-Apr Wednesday 358 789 293 (Round to two decimal places as needed.) 11-Apr Wednesday 388 665 299 18-Apr Wednesday 426 628 269 25-Apr Wednesday 331 729 253 3-Apr Tuesday 296 648 325 10-Apr Tuesday 308 572 328 17-Apr Tuesday 297 588 358 24-Apr Tuesday 229 529 402 5-Apr Thursday 402 308 273 12-Apr…arrow_forwardWhich of the following would the auditor be most concerned about regarding a heightened risk of intentional misstatement? * Senior management emphasizes that O job evaluations are based on performance Senior management emphasizes that budgeted amounts for expenses are to be achieved for each reporting period or explained in the variance analysis report Senior management emphasizes that O job rotation is a worthwhile corporate objective Senior management emphasizes that it is very important to beat analyst estimates of earnings every reporting periodarrow_forwardDate Day 4-Apr Lunch Sales $ Wednesday Dinner Sales $ Delivery Sales $ 360 11-Apr 788 285 Wednesday 389 662 292 18-Apr Wednesday 410 630 269 25-Apr Wednesday 350 734 235 3-Apr Tuesday 296 651 326 10-Apr Tuesday 317 589 324 17-Apr Tuesday 293 566 368 24-Apr Tuesday 228 523 416 5-Apr Thursday 393 804 272 12-Apr Thursday 407 891 239 19-Apr Thursday 343 920 284 26-Apr Thursday 435 935 353 6-Apr Friday 433 1285 1248 13-Apr Friday 498 1184 1070 20-Apr Friday 465 1338 1259 27-Apr Friday 383 1416 1152 1-Apr Saturday 882 1341 490 8-Apr Saturday 705 1200 331 15-Apr Saturday 744 1139 334 22-Apr Saturday 850 1326 319 29-Apr Saturday 773 1222 389 31-Mar Sunday 532 1472 883 7-Apr Sunday 452 1660 788 14-Apr Sunday 498 1580 723 21-Apr Sunday 620 1741 28-Apr Sunday 639 588 1864 604arrow_forward
- The following is a partial performance report for a revenue center for the Southeast Division of Flower City Restaurants. (Click the icon to view the financial results.) Fill in the missing amounts. Indicate whether each variance is favorable (F) or unfavorable (U). (Enter the variances as positive numbers and round the vari percentages to the nearest tenth of a percent, X.X%. Label each variance as favorable (F) or unfavorable (U).) Product Food Dessert Bar Catering Flower City Restaurants Southeast Division Sales Revenue for For the Month Ending June 30 $ $ $ $ Actual Sales Budgeted Sales 146,000 22,000 54,000 55,000 141,620 S 21,340 $ 58,320 $ 52,800 $ Variance (U or F) GLUTE Variance % (U or F) % % % %arrow_forward1. In 2020 standard cost variance analysis report presented by the controller of ABC Corporation, the labor cost variance shows that efficiency has resulted to favorable variance, while rate shows unfavorable variance. Which of the following could have been the reason for the said outcome? a) The workers assigned in the production department were experienced and skilled individuals and relatively high paid b) The workers assigned by the human resources management were unskilled and relatively low paid c)The workers were pushed to over time due to inefficiency in making the product. d) Low quality materials were used and caused more labor hours to be produced 2. Which of the following would result to a favorable volume variance? a)There is a favorable spending variance b)Production is equal to sales c)There is a favorable efficiency variance d)Production is greater than budgeted 3. Which of the following…arrow_forwardThese are measures not found in the chart of accounts, such as customer satisfaction scores or product quality measures. A. Quality measures B. Non-financial measures C. Financial Measures D. Balanced Scorecard A manager would like to see reduction of the following operational measures, except: A. Spoilage B. Number of customer complaints C. Queue time D. Manufacturing Efficiencyarrow_forward
- 28) In regard to the Sales-Volume Variance, which of the following statements is false. A) The Sales-Volume Variance is commonly caused by external factors such as competitors taking away market share B) The Sales-Volume Variance occurs due to the differing number of units reported as sold in the Fixed Budget and Flexible Budget. C) The Sales-Volume Variance is the difference between the Fixed Budget's Operating Income and the Flexible Budget's Operating Income D) The Sales-Volume Variance is the difference between the Flexible Budget's Operating Income and Actual Results Operating Incomearrow_forwardUsing the accompanying data of restaurant sales, determine if the variance of weekday sales is the same as that of weekend sales for each of the three variables (lunch, dinner, and delivery). Click the icon to view the restaurant sales data. Is there sufficient evidence at the 0.01 level of significance to conclude that the variance of weekday sales is the same as that of weekend sales for lunch sales? Determine the null hypothesis, Ho, and the alterative hypothesis, H₁ Let weekend sales be population 1 and weekday sales be population 2. 2 2 100 0 2 2 0 Ho 0-0 H₁: 0-0 (Type integers or decimals. Do not round.) Compute the test statistic. 3.95 (Round to two decimal places as needed.) Find the one-tail p-value for the test. Survey data Date 4-Apr 11-Apr Day Wednesday Wednesday Lunch Sales $ 358 Dinner Sales $ Delivery Sales S 789 293 386 665 299 18-Apr Wednesday 426 628 269 25-Apr Wednesday 331 729 253 3-Apr Tuesday 296 648 325 10-Apr Tuesday 308 572 326 17-Apr Tuesday 297 568 358 24-Apr…arrow_forwardIn gross profit analysis, a favorable cost of sales variance that includes an unfavorable cost volume variance will mean: * a. The production department was able to control costs within the budget but the purchasing department went over the budget. b. The purchasing department was able to control costs within the budget but the production department over the budget. c. The production and purchasing department were able to control costs within the budget. d.The production and purchasing departments went over the budget.arrow_forward
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