VAR

Question 1

what is a reason for an adverse variance in sales margin volume?

Answer 1

1. poor performance from sales staff
2. deteration in markrt conditions between time that budget was set and the actual event
3. production error restricting the amount of goods/services available to sell
4. higher price
5. poor marketing campaign

Question 2

what is a reason for a favourable variance in sales margin volume?

Answer 2

1. good performance from sales staff
2. favourable markrt conditions between time that budget was set and the actual event
3. innovative products that are appealing to consumers
4. exceptional marketing and advertising
5. lower price
6. fall in quality of comeptiors

Question 3

what is a reason for an adverse variance in sales price?

Answer 3

1. poor performance from sales staff
2. deteration in markrt conditions between time that budget was set and the actual event
3. reduction in quality/performance
4. higher anticipated demand for compeitors products

Question 4

what is a reason for an favourable variance in sales price?

Answer 4

1. good performance from sales staff
2. favourable markrt conditions between time that budget was set and the actual event
3. higher than anticipated customer demand
4. an improvement in quality or performance

Question 5

what is a reason for an adverse variance in materials usage?

Answer 5

1. poor performance from production department leading to high levels of scrap
2. standardised materials leading to high levels of scrap
3. faulty machinery leading to high levels of scrap

Question 6

what is a reason for an favourable variance in materials useage?

Answer 6

• Higher quality materials
• More efficient use of
material
• Change in product
specification
• Incorrect budgeting

Question 7

what is a reason for an adverse variance in materials price?

Answer 7

1. poor performance by procurment department
2. using higher quality matieral than needed
3. Change to a more
   expensive supplier

Question 8

what is a reason for an favourable variance in materials price?

Answer 8

. Poorer quality materials
• Discounts given for
buying in bulk
• Change to a cheaper
supplier
• Incorrect budgeting

Question 9

what is a reason for an adverse variance in fixed OH expeniture?

Answer 9

1. poor supervison of OH

2. general increase in costs of OH not being considered in the budget

Question 10

what is a reason for an favourable variance in labour efficientcy?

Answer 10

Higher skilled staff
• Improved staff motivation
• Incorrect budgeting

Question 11

what is a reason for an adverse variance in labour price?

Answer 11

1. poor performance by HR
2. using higher skilled workers than needed
3. unforeseen wage increase

Question 12

what is a reason for an favourable variance in labour price?

Answer 12

Lower skilled staff
• Cut in overtime/ bonus
• Incorrect budgeting

Question 13

what is a reason for an adverse variance in fixed OH volume?

Answer 13

1. poor supervison of OH
2. general increase in costs of OH not being considered in the budget
3. decrease in demand
4. production lost due to strikes

Question 14

what is a reason for an favourable variance in variable OH volume?

Answer 14

Increase in production
volume (over-absorption)
• Increase in demand
• Change is productivity of
labour

Question 15

what is a reason for an favourable variance in variable OH expenditure?

Answer 15

Decrease in price

• Seasonal effects

Question 16

what is a reason for an adverse variance in variable OH expenditure?

Answer 16

Increase in price

• Seasonal effects