Page 318 - SBL Integrated Workbook STUDENT 2018

Chapter 23

8.3 Example causes variances
Key roles

Sales price Higher/lower than expected discounts offered

The effect of low price offers during a marketing campaign.
Market conditions forcing an industrywide price change.
Changes to product quality or design.

Sales Successful or unsuccessful marketing efforts.
volume
Unexpected changes in customer needs and buying habits.
Failure to satisfy demand due to production difficulties.
A change in selling prices

Changes to the level or nature of competition.
Changes to product quality or design.

Materials Using a different supplier.
price
Changes to volume leading to achieving/losing bulk discounts.
Market shortages of materials.
Unexpected buying costs, such as high delivery charges.

Efficient or inefficient buying procedures.
A change in material quality, resulting in either higher or lower
purchase prices.
Materials Using a different quality of material could affect the wastage rate.
usage
Defective materials.

Better/worse quality control.
More/less efficient work procedures.
Changes to production methods or product design.

Changing the materials mix to obtain a more/less expensive mix than
the standard.
Labour rate An unexpected increase in basic rates of pay.

Payments of bonuses, where these are recorded as direct labour
costs.

Changes to the labour mix resulting in using labour that is more or
less experienced (and so more or less expensive) than the 'standard'.
Labour shortages.

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