Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 20

“A favorable sales quantity variance indicates that the marketing manager has done a good job.” Do you agree? Can you give an example in which a market size variance or market share variance is opposite to that of the sales quantity variance?

Step 1 of 2

Variances: Variance in costing means there is a difference between the real cost and the standard cost. Variance is related to both the cost element and the revenue element and they can be favorable or unfavorable.

Sales Variances: Sales Variance is the financial difference between the actual or real sales and the estimated sales. Sales variance is the change in the sales revenue arising due to the deviation in the actual sales price or the actual sales volume as compared to the budgeted sales price or the budgeted volume of units sold.