Management Accounting

Question 1

Variance Analysis

Static Budget Variance

Answer 1

Actual Results = AQ x AP
Static Budgets = SQ x SP
Static Budget Variance = Actual Results - Static Budget

Question 2

Variance Analysis

Flexible Budget Variance

Answer 2

Flexible Budgets = AQ x SP
Flexible Budget Variance = Actual Result - Flexible Budget
(AP - SP) x AQ

Question 3

Variance Analysis

Sales Volume Variance

Answer 3

Sales Volume Variance = Flexible Budget - Static Budget

(AQ - SQ) x SP

Question 4

Variance Analysis

Rate Variance

Answer 4

Rate Variance = (AP - SP) x AQ

Question 5

Variance Analysis

Efficiency Variance

Answer 5

Efficiency Variance = (AQ -SQ) x SP

Question 6

Variance Analysis

Sales quantity Variance

Answer 6

(Actual units of all products sold – Budgeted units of all products sold) * Budgeted sales mix % * Budgeted CM/Unit

Question 7

Variance Analysis

Sales Mix Variance

Answer 7

Actual units of all products sold *(Actual sales mix % - budgeted sales mix %) * budgeted average CM/unit

Question 8

Variance Analysis

Market Share Variance

Answer 8

Actual market size in units * (Actual market share - Budgeted market share) * Budgeted average CM/Unit

Question 9

Variance Analysis

Market Size Variance

Answer 9

(Actual market size in units – Budgeted market size in units) * Budgeted market share * Budgeted average CM/unit

Question 10

Variance Analysis

Fixed Overheard Budget Variance

Answer 10

Actual fixed overhead – Budgeted fixed overhead

Question 11

Variance Analysis

Production Volume Variance (Fixed Cost Volume Variance)

Answer 11

(Actual units produced – Budgeted units produced) * Budgeted overhead rate