M7-Variance Analysis

Question 1

Sales volume variance arises solely because the quantity sold differs from the quantity budgeted to be sold. (true or false)

Answer 1

true

Question 2

A revenue variance (also known as a sales price variance) is due to a change in unit selling prices. (true or false)

Answer 2

true

Question 3

The purpose of identifying and assigning responsibility for a variance to a person/department should be to use the knowledge to promote learning and continuous improvement. (true or false)

Answer 3

true

Question 4

The purchasing manager is directly involved in the negotiation of materials prices and would have the greatest influence over the direct materials price variance. The direct materials price variance could be used to monitor purchasing manager performance. (true or false)

Answer 4

true

Question 5

The production volume variance is due to the difference from the planned level of the base used for overhead allocation and the actual level achieved. (true or false)

Answer 5

true