How can the concept of a composite unit be used to explain why an unfavorable total sales-mix variance of contribution margin occurs?
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The actual contribution margin per unit will impact the following sales variance:a. Flexible-budget variance b. Market-size variance c. Market-share variance. des-quantity variance
Show how managers can gain insight into the causes of a sales-volume variance by subdividing the components of this variance.
The Insurance Company insures homeowners in three regions of the United States: Eastern, Midwest, and South. In the past year, several hurricanes hit the Southern region of the United States, requiring payments to insured homeowners.Management of the company wishes to analyze the profitability of the three key regions and has gathered the following information:In addition to the customer-level costs above, the company also allocates 750,000 dollars of corporate costs to each region based on the revenues of each region. 1\. Prepare a cost-hierarchy income statement for The Insurance Company using the format in Exhibit \(14-7\) assuming corporate costs are not allocated to each region. 2\. Allocate the corporate costs to each region and calculate the income of each region after assigning corporate costs. 3\. Should top management of The Insurance Company close down the South region? Explain. 4\. What are the advantages and disadvantages of The Insurance Company allocating corporate costs to the regions?
How can a company track the extent of price discounting on a customer-by- customer basis?
Explain why a favorable sales-quantity variance occurs.
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