A current performance report reveals a large favorable sales volume variance but an unfavorable sales price...
A current performance report reveals a large favorable sales volume variance but an unfavorable sales price variance. You don't expect a large increase in sales volume. What steps do you take to analyze the situation?
Homework Answers
Sales volume variance means multiplication of Budgeted price with the difference between the actual and Budgeted number of units sold. Equation is
Sales Volume Variance =Budgeted price unit (Actual unit sold-Budgeted unit sold)
In this case there is a large sales volume variance which means actual unit sold is greater than budgeted unit sold.
In order to analyses these situation following steps are analysed
1.Budgeted number of unit sold is analysed carefully because it is the estimation of managers based on several factors like market share,product price , marketing activities etc.
2.Price of product to be analysed ,if the selling price is lower than budgeted it loads to sales volume variance favorable.
3.Restriction related to trade is analysed because it has wide impact on the sales competition,price of product .
4.Competition is also a important factor ,which means more customers leads to sales volume increase.
5.Product Differentiation leads to sales volume favorable it is to be analysed.
6.Growth strategy of company is to be analysed ,whether company adopted a growth strategy which leads to increase in sales volume.
Through the analysis of above factors managers can find the reason for the situation and decide accordingly.
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A current performance report reveals a large favorable sales
volume variance but an unfavorable sales price...
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Question 1: Sales price variance, sales volume variance, and fixed cost variance Budgeted Actual Price $600...
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McDormand, Inc., reported a $2,400 unfavorable price variance for variable overhead and a $24,000 unfavorable price...
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McDormand, Inc., reported a $3,400 unfavorable price variance for variable overhead and a $34,000 unfavorable price...
McDormand, Inc., reported a $3,400 unfavorable price variance for variable overhead and a $34,000 unfavorable price variance for fixed overhead. The flexible budget had $1,083,000 variable overhead based on 36,100 direct labor-hours, only 34,100 hours were worked. Total actual overhead was $1,810,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,500 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. Complete this question by entering your answers in the tabs...
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Required 2 Required 1 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Volume Variance Volume variance Required 1 Required 3 Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 9,000 units. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no...
Clothing Department Budget Report For the Month Ended October 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Sales in units 7,800 10,000 2,200 Favorable Variable expenses Sales commissions $1.872 $2,400 $528 Unfavorable Advertising expense 936 900 36 Favorable Travel expense 3,120 4,000 880 Unfavorable Free samples given out 1,794 1,300 494 Favorable Total variable 7,722 8,600 878 Unfavorable Fixed expenses Rent 1,700 1,700 -0- Neither Favorable nor Unfavorable Sales salaries 1,100 1.100 -0- Neither Favorable nor Unfavorable...
A flexible budget performance report compares the differences between: Help Save & Exit Actual performance and budgeted performance based on actual sales volume. Actual performance over several periods Budgeted performance over several periods Actual performance and budgeted performance based on budgeted sales volume Actual performance and standard costs at the budgeted sales volume We were unable to transcribe this image$29,000 unfavorable $29,000 favorable $22,500 unfavorable. $52.500 favorable. $52,500 unfavorable Identify the situation below that will result in a favorable variance...
What is the direct labor rate variance? 50 unfavorable 125 unfavorable 125 favorable The following information for Q 7-8 The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% normal production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was S3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,800 units. 7. The variable factory...
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McDormand, Inc., reported a $3,400 unfavorable price variance for variable overhead and a $34,000 unfavorable price variance for fixed overhead. The flexible budget had $1,083,000 variable overhead based on 36,100 direct labor-hours, only 34,100 hours were worked. Total actual overhead was $1,810,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,500 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. Complete this question by entering your answers in the tabs...
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