Chapter five measuring yield, mix and quantity effects learning Objectives

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Applied Econometrics using MATLAB, Management and Cost Accounting, case study 301.docx
Sales-quantity variance
The sales-quantity variance is the difference between two amounts (1) the budgeted amount based on actual quantities sold of all products and the budgeted mix, and (2) the amount in the static budget (which is based on the budgeted quantities to be sold of all products and the budgeted mix. The formula for computing the sales. quantity variance in terms of revenues and the amounts for Global Air is:
Sales-quantity Actual units Budgeted units Budgeted Budgeted variance of = of all product - of all products x Sales-mix x Selling price revenues sold sold percentage per unit First class (24 000 — 20000) xx F Business class (24000 —20000) xx F Economy class = (24000—20000) xx F
$4960000F This variance is favorable when the actual units of product sold exceed the b units of product sold. Global sold 4000 more round-trip tickets than was budgeted. Hence, its sales-quantity variance for revenues is favorable.

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