Neeb Corporation Manufactures and Sells a Single Product

question 73

Multiple Choice

Neeb Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 7,000 units, but its actual level of activity was 7,040 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January:Data used in budgeting: Actual results for January:
The activity variance for selling and administrative expenses in January would be closest to:

• A) $446 U
• B) $16 U
• C) $446 F
• D) $16 F

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Definitions:

Interest Rate Sensitivity

The degree to which the value of an investment, particularly fixed-income securities, changes in response to variations in interest rates.

Duration

A measure of the sensitivity of the price of a bond or a bond portfolio to changes in interest rates, usually expressed in years.

Interest-Rate Risk

The risk that an investment's value will change due to a change in the absolute level of interest rates, which can affect both debt and equity instruments.

Bond Portfolio Managers

Professionals who specialize in the strategic management of bond portfolios, aiming to maximize returns and minimize risks for investors.