In 20x2, OSW Corporation Budgeted Its Sales Volume at 10,000

question 43

Multiple Choice

In 20x2, OSW Corporation budgeted its sales volume at 10,000 units. Actual volume was 9,800 units. If OSW uses the static budget to calculate variances and assuming that inventory levels are insignificant, which of the following statements is true?

• A) Profits will be less than expected
• B) Budgeted variable costs will be overstated compared to actual variable costs
• C) Profits will be more than expected due to favorable cost variances
• D) Sales managers will not receive a bonus

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Definitions:

Layoffs

The act of temporarily or permanently reducing a company's workforce due to business needs, economic downturns, or other financial pressures, often leading to job loss for affected employees.

Weeks Of Wages

A measure of compensation or benefits based on the amount an employee would earn over a specified number of weeks.

Voluntary Employee Turnover

Occurs when employees choose to leave their jobs, whether for personal reasons, better employment opportunities, or dissatisfaction with their current roles.

Low Pay

Compensation for work that is significantly lower than the average wage for a particular job or sector.