1.Martin in Management Accounting: Concepts, Techniques and Controversial issues, presents four variances.Define each one and explain which are the most useful in cost analysis.

Sales Price Variance= Actual sales revenue - Flexible budget sales revenue for actual units sold

= (AP)(AU) - (BP)(AU) or (AP-BP)(AU)

Unit Cost Variance= Actual variable costs - Flexible budget variable costs for actual units sold

= (AV)(AU) - (BV)(AU) or (AV-BV)(AU)

Revenue Part of Sales Volume Variance= Flexible Budget Sales Revenue for actual units sold - Master budget sales revenue

= (AU)(BP) - (BU)(BP) or (AU-BU)(BP)

Cost part of Sales Volume Variance= Flexible budget variable costs for actual units sold - Master budget variable costs

= (AU)(BV) - (BU)(BV) or (AU-BU)(BV)