Quiz 1 Essay 1 Martin In Management Accounting Concepts Techniques And Controversial 2814474

Quiz #1 Essay

1. Martin in Management Accounting: Concepts, Techniques and Controversial issues, presents four variances. Define each one and then 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)


2. Martin in Management Accounting: Concepts, Techniques and Controversial issues, presents a cost-volume-profit analysis (CVP). Explain CVP, when it is useful and what are its limitations.

Prof. Angela

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