Gross profit variance analysis can be used to study the effect of: a. Changes in cost of goods sold on a company's profitability. b. Changes in selling prices on a company's profitability. c. Changes in volume of goods sold on a company's profitability. d. All of the choices. Changes in product sales mix on a company's profitability.

Gross profit variance analysis can be used to study the effect of: a. Changes in cost of goods sold on a company's profitability. b. Changes in selling prices on a company's profitability. c. Changes in volume of goods sold on a company's profitability. d. All of the choices. Changes in product sales mix on a company's profitability.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 17GI

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Gross profit variance analysis can be used to study the effect of: a. Changes in volume of goods sold on a company's profitability. b. Changes in cost of goods sold on a company's profitability. c. Changes in product sales mix on a company's profitability. d. All of the choices. e. Changes in selling prices on a company's profitability.
D.) Total Gross Profit Variance E.) Sales Mix Variance F.) Final Sales Volume Variance
Which statement is true? A. Gross profit (GP) variance analysis, is an essential part of financial statements analysis that is used to evaluate the performance of a firm's departments responsible for the firm's line activities (functions). B. Increases and decreases in sales and cost of sales have direct relationship with increases and decreases in GP. C. If there is a negative sales price variance and there is no cost variance, the gross profit variance will be equal to the sales price variance. D. A zero cost variance indicates that there is no difference between the standard cost prices and actual cost prices. E. none of the above
Gross profit variance analysis can be used to study the effect of: " Changes in cost of goods sold on a company's profitability. O Changes in product sales mix on a company's profitability. Changes in selling prices on a company's profitability. O All of the choices. O Changes in volume of goods sold on a company's profitability.
Bulldogs Inc. wants to determine the impact of the change in selling price of its sole product in relation to the analysis of its gross profit. Which of the following must the company determine? a. Sales Volume Variance b. Cost Price Variance c. Volume Variance d. Sales Price Variance
Which of the following statements is incorrect? a. Sales volume variance is the amount by which sales would have varied from the base sales if only the sales volume had changed. b. Sales price variance measures the impact on the firm’s gross profit of changes in the unit selling price. c. Cost volume variance is the amount by which cost of sales would have varied from the base cost of sales if only the units produced had changed. d. Cost price variance measures the impact on the firm’s gross profit of changes in the unit cost price or cost of sales.
Which of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratio
A.) Sales Price Variance B.) Cost Price Variance C.) Quantity Variance D.) Total Gross Profit Variance E.) Sales Mix Variance F.) Final Sales Volume Variance
What are the other external factors that affects the variance of a company's gross profit?
Cite a specific example of the application of gross profit variance analysis. How will it help the company in its decision making?
Which of the following underlying assumptions form(s) the basis for gross profit variance analysis? A. In multi-product organization, the sales mix remains discretionary. B. Sales and costs behave in ainear manner C. All of the choices are assumptions that underlie gross profit variance analysis D. Costs can be categorized as variable
Which of the following statements is false? a. The price factor refers to the change in selling or cost prices assuming there has been no change in units sold. b. The net gross profit variance can be computed by adding the sales price variance and the cost price variance. c. The price-volume factor refers to the sales or cost of sales variances due to the combined effects of the differences in prices and units sold d. The quantity factor refers to the change in the number of units sold assuming there has been no change in the selling or cost prices.