The Amount by Which Actual or Expected Sales Exceeds Break-Even

question 63

Multiple Choice

The amount by which actual or expected sales exceeds break-even sales is referred to as

• A) contribution margin.
• B) unanticipated profit.
• C) margin of safety.
• D) target net income.

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Definitions:

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit.

Raw Materials Price

The cost of raw materials required in the manufacturing process, a critical factor in the overall production cost and pricing strategy.

Variance

The difference between a planned, budgeted, or standard amount and the actual amount incurred or realized.

Revenue Variance

The difference between actual revenue earned and expected revenue, often used in budgeting and financial analysis.