Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 14 - Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis - Assignment Material - Questions - Page 579: 14-12

Answer

Managers can gain insight into the causes of a sales-volume variance by subdividing it into its components, such as price, quantity, and product mix variances. This breakdown allows them to pinpoint whether the variance is due to changes in selling prices, the number of units sold, or the mix of products sold. Analyzing these components helps in identifying the specific factors driving the variance and enables managers to take appropriate actions to address them.

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