What question did this study set out to answer?

The paper aims to clarify the use of Laspeyres indexes in variance analysis related to direct costs and production.

Laspeyres Indexes for Variance Analysis in Cost Accounting.

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Reports variance analysis using Laspeyres indexes in cost accounting, suggesting implications for managerial decision-making.

The paper aims to clarify the use of Laspeyres indexes in variance analysis related to direct costs and production.
Calculated variances using Laspeyres indexes for direct costs and production/sales.
Split quantity variance into mix and volume variances.
Proposed a method for allocating joint variance between price and quantity variances.
Elucidated the economic significance of variance analysis in cost accounting.
Demonstrated that average changes affect both price and quantity variances.
Provided a more informative and simpler approach for managers to compute variances.

Bashan et al. (1973) studied this question.

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