If the Actual Level of Sales Significantly Exceeds the Sales

question 79

Multiple Choice

If the actual level of sales significantly exceeds the sales in the master budget, the variances associated with the variable costs will probably be:

• A) zero
• B) unfavorable
• C) favorable
• D) undeterminable

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Definitions:

Other Comprehensive Income

Components of comprehensive income that are not part of net income, including items that have not yet been realized as cash, such as unrealized gains or losses on investments.

Amortized Cost

Amortized cost refers to the accounting practice of gradually writing off the initial cost of an asset over its useful life or the repayment period of a loan.

Equity Securities

Equity securities are financial instruments that signify an ownership interest in a company or entity and may provide income through dividends or the potential for capital gains.