14-4: Helping Students See the 'Big Picture of Variance Analysis by Neal VanZante,

Please use the following link for case study: http://www.coursehero.com/r/3sPsRtMn

Management Accounting Quarterly, Vol. 8, No. 3 (Spring 2007), in the Cases and Readings_Ch14 file, pgs. 33-45.The Fernandez Company example requires students to first calculate the total flexible budget variance (in operating income) for a period and then breakdown this variance into its constituent parts (selling price variance, various cost variances, etc.). Use excel to d this and attach your files here.

After reading the article and both cases, answer the following questions.

Discussion Questions

1. What is meant by the total operating-income variance for a given accounting period? What alternative names are there to describe this variance.

2. What would be a first-level breakdown of the total variance described above in (1)?

3. How can the total flexible-budget variance be broken down (i.e., what are the constituent parts of this total variance)?

4. Explain the total sales volume variance for a period. How can this total variance be decomposed?

5. Explain the meaning of the joint price-quantity variance that is the basis for the discussion in the

Roger Company case