Assume that sales quantity variance is $26,560 unfavourable, market share variance is $74,700 unfavourable. Which of the following statements is TRUE? A) Actual market size is lower than budgeted market size. B) Actual market size is higher than budgeted market size. C) Actual market share is higher than budgeted market share. D) None of these answers is correct.

Assume that sales quantity variance is $26,560 unfavourable, market share variance is $74,700 unfavourable. Which of the following statements is TRUE? A) Actual market size is lower than budgeted market size. B) Actual market size is higher than budgeted market size. C) Actual market share is higher than budgeted market share. D) None of these answers is correct.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 20Q: In comparing actual sales revenue to flexible budget sales revenue, would it be possible to have a...

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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.
Which of the following statements about variances is false? If actual direct material price is less than budgeted, the result is an unfavorable materials price variance. If actual sales price is less than budgeted, the result is an unfavorable revenue variance. If actual sales volume is less than budgeted, the result is an unfavorable activity variance. If actual profit is less than budgeted, the result is an unfavorable total profit variance. None of the above is true.
Considering the variance analysis, which of the following statements is true? a. When there is favourable variance the actual profit is higher than the budgeted profit (lower costs than budgeted or higher income than budgeted.. b. When there is favourable variance the actual profit is lower than the budgeted profit (higher costs than budgeted or higher income than budgeted. c. None of the answers provided are true d. When there is adverse variance the actual profit is lower budgeted profit (lower costs than budgeted or lower income than budgeted. e. When there is adverse variance the actual profit is higher budgeted profit (higher costs than budgeted or lower income than budgeted.
Which of the following statements is true? I. A revenue variance is unfavorable if the revenue in the static planning budget is less than the revenue in the flexible budget. II. A favorable spending variance occurs when the actual cost is less than the amount of the cost in the static planning budget. III. A revenue variance is favorable if the actual revenue is greater than the revenue in the static planning budget. Multiple Choice O Only statement III is true. All of the statements are true. Only statement I is true. None of the statements are true.
In comparing actual sales revenue to flexible budget sales revenue, would it be possible to have a favorable variance and still not have met revenue expectations?
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 about margin of safety is false? a. Margin of safety measures the difference between budgeted revenues and breakeven revenues. b. If the variable cost per unit decreases but the number of units sold, unit selling price and total fixed cost are all constant, the margin of safety decreases. c. If only the fixed costs decrease but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety increases. d. If only the fixed costs increase but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety decreases. e. none of the given answers is false.
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
Considering the variance analysis, which of the following statements is true? O a. When there is adverse variance the actual profit is lower budgeted profit (lower costs than budgeted or lower income than budgeted. O b. When there is adverse variance the actual profit is higher budgeted profit (higher costs than budgeted or lower income than budgeted. O c. When there is favourable variance the actual profit is higher than the budgeted profit (lower costs than budgeted or higher income than budgeted.. O d. When there is favourable variance the actual profit is lower than the budgeted profit (higher costs than budgeted or higher income than budgeted. O e. None of the answers provided are true
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 Income
Which of the following statements is NOT true about a sales mix variance? O If actual sales revenues from two products are in the same ratio as the budgeted sales revenues there is no measurable sales mix variance O If actual sales volumes are in the same ratio as the budgeted sales volumes there is no measurable sales mix variance O If the actual sales volumes of all products are 10% above the budgeted sales volumes, there is no measurable sales mix variance O If all products have the same budgeted margin there is no measurable sales mix variance