Problem 23-6BA (Concluded)
Part 2
Under management by exception, the manager would first identify the
The largest variance amounts occur for the materials quantity variance, the
materials price variance, the direct labor efficiency variance, and the
volume and controllable overhead variances. The manager should go to the
After the relatively larger amounts are explained and actions taken, the
* The unfavorable volume variance indicates that the company produced fewer
SERIAL PROBLEM — SP 23
Serial Problem, Business Solutions (30 minutes)
Business Solutions
Flexible Budget Performance Report
For Quarter Ended June 30
Flexible Actual
Budget Results Variances
Desk sales (150 units)………………………….$187,500 $186,000 $1,500 U
Chair sales (80 units)…………………………..
40,000
41,200
1,200
F
Supporting computations
Total budgeted desk sales………………………………………………….$180,000
Total units budgeted………………………………………………………….. 144
Total budgeted chair sales………………………………………………….$ 36,000
Total budgeted variable costs for desks……………………………..$108,000
Serial Problem, Business Solutions (concluded)
Total budgeted variable costs for chairs……………………………..$18,000
Reporting in Action — BTN 23-1
1. For foreign subsidiaries that do not use the U.S. dollar as their
2. a. As reported in its footnote, the assets and liabilities of foreign
c. Assets and liabilities of foreign subsidiaries (e.g. property, plant and
Comparative Analysis — BTN 23-2
1. Apple and Google sales figures for the most recent 3 years—data
available from Appendix A—are shown below ($ millions):
Two Years
Prior
One Year
Prior
Current
Year
One
Year
Ahead
Two Years
Ahead
2. Predictions will vary among students. Generally, predictions should
reflect both the trend in the company’s sales data and current industry
Ethics Challenge — BTN 23-3
A typical answer might include four individuals selected from the following
specialty areas (answers will vary among students):
Specialty Information Input and Explanation
Engineer……………………………Scientific support for quantity standard.
standards.
The ethical challenge for a manager responsible for setting and/or revising
Communicating in Practice — BTN 23-4
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
Variance Cost of Goods Sold Gross Margin
Part 1. Favorable Decrease Increase
Part 2. Unfavorable Increase Decrease
Part 3. A favorable (unfavorable) variance means that actual costs are
Taking It to the Net — BTN 23-5
1. Benchmarking is a method whereby organizations try to look to other
organizations to identify “best practices” so as to improve and attain
2. Given that a benchmark can be considered as a standard, companies
Teamwork in Action — BTN 23-6
Answers will vary depending on the two industries selected. Two
examples are identified and briefly described below:
i. Overnight delivery services: 10 a.m. delivery, late-day drop-off, pick-up
service, tracking systems, fast-moving workforce.
ii. Hotel services: clean rooms, fast check-in, fast/in-room check-out,
luggage delivered to room quickly, immediate room service.
Entrepreneurial Decision — BTN 23-7
To: Chris Sugai, President
Niner Bikes
Re: Management Accounting Quote Interpretations
Quote 1: “Variances are not explanations”
The author of this quote is emphasizing that variances are only a starting
Quote 2: “Management’s goal is not to minimize variances.”
The author of this quote understands that the real objective of management
Hitting The Road — BTN 23-8
2. Observe that the national chain probably follows specific measurement
3. These observations reflect an important issue for pizza businesses and
Global Decision — BTN 23-9
1. Samsung’s sales figures for the most recent 2 years — data available
from its website — are shown below (₩ millions)
Sales
One Year
Prior
Current
Year
One Year
Ahead
Two Years
Ahead
13.7% incr.
2. Predictions will vary among students. Generally, predictions should