Explain the difference between the sales volume variance and the production volume variance.
What will be an ideal response?
The sales activity or sales volume variance measures the difference between budgeted profits on the master budget versus budgeted profits at the actual sales output level. The variance is due solely to the difference in the sales volume. The production volume variance is the difference between actual production in units and the capacity used to develop the fixed overhead rates. The production volume variance is due to production volume differences, not sales volume differences. Furthermore, the sales volume variance is measuring a difference in profits while the production volume variance is measuring a difference in fixed costs only.
You might also like to view...
When circumstances preclude an auditor from performing certain procedures and the auditor can be satisfied using other alternative procedures, a disclaimer of opinion will be rendered
a. True b. False Indicate whether the statement is true or false
Anything that an agent obtains by virtue of the employment or agency relationship is his or hers to keep
Indicate whether the statement is true or false
The promoter of a corporation is
A. the incorporator. B. an individual or entity that actively assists in creating, projecting, and organizing a corporation. C. an individual who invests in stock of the corporation prior to its formation. D. the individual or entity that signs and files the articles of incorporation.
The ability to obtain a given equity position at a reduced capital investment, and therefore magnify returns, is known as
A) leverage. B) straddling. C) hedging. D) triple witching.