Q1. Discuss the three variances that help explain the sales volume variance. Q2. Identify four revenue drivers. Q3. Why is the efficiency variance more useful for control purposes than the price variance? Q4. Explain why variances for direct material and direct labour are separated into price and efficiency variances. ?

Q5 Sunset Solar installs solar panels throughout Australia. The accountants estimated the market size to be 2 million solar panels with Sunset Solar hoping to achieve 5% market share. The static budget shows that each panel is expected to provide a $2000 contribution margin. At the end of the financial period, the actual sales volume was 90 000 panels. Management were surprised by the low sales volume especially given that analysts had identified that the market size had grown by 2% due to government rebates on solar panel installation. Required (a) Calculate the actual market size. (b) Calculate the actual market share. (c) Calculate the market size variance. (d) Calculate the market share variance. (e) Identify several factors that could have caused the variance identified in (d).

Q6

Direct materials and labour variances, variances to investigate The managers of Bathroom Cabinets established the following standards for Model 535:

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Direct materials Direct labour Quantity standard 0.8 kg per unit 0.2 hours per unit Price standard $2 per kg $17 per hour Direct materials Direct labour Quantity standard 0.8 kg per unit 0.2 hours per unit Price standard $2 per kg $17 per hour