Mgmt Reporting/PM

Question 1

[Formula] Sales Revenue Variance

Answer 1

1) Sales Price Variance = (AP-SP)/AQ

2) Sales Volume Variance = (AQ-SQ)/SP

Question 2

[Formula] Direct and Variable Cost Variance

Answer 2

1) Price / Rate Variance = (AC-SC)/AQ

2) Quantity / Efficiency Variance = (AQ-SQ)/SC

Question 3

External Analysis - list examples of analysis techniques

Answer 3

1) Porter’s Five Forces: threat of subs + new entrants, bargaining power of supplier + cx, competitive rivalry
2) SWOT Analysis

Question 4

Describe the composition and duties of audit and finance committee

Answer 4

Purpose: assist the BoD to liaise with the external auditors
Composition: independent from the company, basic knowledge of finance and accounting, one member should have expert knowledge in finance/accounting
Duties:
- Review and discuss issues arise from audit of f/s
- Review and discuss audited f/s with mgmt and auditors
- Oversee compliance with legal, tax, and regulators
- Monitor effectiveness of internal control processes and risk management systems