Sales volume variances can have significant implications for strategic management. An unfavorable sales volume variance may indicate that:
A) The industry is in decline.
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.

Question

Quizplus · Accepted Answer

An unfavorable sales volume variance may indicate that the company's current competitive strategy is not effective and a new strategy may be needed to increase sales. It does not necessarily indicate that the industry as a whole is in decline or that labor productivity is an issue. Product mix changes and quantity variances are separate variances and may not necessarily always be linked to sales volume variances.

Sales Volume Variances Can Have Significant Implications for Strategic Management