Question

The difference between actual volume sold and expected volume sold multiplied by expected price is called the:

Select one:

a. sales price variance.

b. sales volume variance.

c. total sales variance.

d. sales efficiency variance.

Which of the following costs is relevant to a make-or-buy decision of a particular part of a product?

Select one:

a. The direct labor costs used to manufacture the part

b. The fixed annual rent paid for the office building

c. The salary of the sales manager who sells the product

d. The depreciation on the plant used to manufacture the part

Answer 1

1. b Sales Volume Variance

Explanation:

The difference between actual volume sold and expected volume sold multiplied by expected price is called the volume variance. Volume variance is related to the variance due to the difference in the expected and actual no of units sold.

2. a. The direct labor cost used to manufacture the product.

Explanation:

Make or buy decision is related to the whether goods should be manufactured or purchased from outside by the business. Direct labor cost being the variable cost and relevant cost is relevant for make or buy decisions.