Sales Volume Variances Can Have Significant Implications for Strategic Management

question 70

Multiple Choice

Sales volume variances can have significant implications for strategic management.An unfavorable sales volume variance may indicate that:

• A)The industry is in decline and the products are obsolete.
• B)The company needs a new competitive strategy.
• C)Product mix changes are favorable but quantity variances are unfavorable.
• D)Labor productivity needs to be addressed.

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Definitions:

Marginal Social Benefit

The additional gain to society as a whole from an additional unit of a good or service.

Emissions Tax

A tax imposed on the emission of pollutants, aimed at reducing the environmental externality costs of these emissions.

Optimal Tax

A tax designed to generate government revenue with the minimum economic distortion or welfare loss.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both the cost to the producer and the cost of any negative externalities associated with production.