Determining sales activity (volume) variances Required Use the information provided in Exercise 8-3B. a. Determine the volume
Question:
Determining sales activity (volume) variances Required Use the information provided in Exercise 8-3B.
a. Determine the volume variances.
b. Classify the variances as favorable or unfavorable.
c. Comment on the usefulness of the variances with respect to performance evaluation and identify the member of the management team most likely to be responsible for these variances.
d. Explain why the fixed cost variances are zero.
e. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity. Assuming Irvin uses information in the master budget to price its product, explain how the volume variance could affect the company’s profitability.
Step by Step Answer:
Fundamental Managerial Accounting Concepts
ISBN: 9780073526799
4th Edition
Authors: Thomas Edmonds, Bor-Yi Tsay, Philip Olds