Bryans Corporation Has Provided the Following Data for Its Two

question 328

Multiple Choice

Bryans Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under absorption costing in Year 2 is closest to:

• A) $146,000
• B) $118,000
• C) $47,000
• D) $41,000

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Definitions:

Variable Budget

Variable Budget is a budget that adjusts based on changes in the volume of activity, allowing expenses to vary in direct proportion to changes in operational levels.

Favorable Variances

Differences between actual and budgeted or standard costs that result in better-than-expected financial performance.

Unfavorable Variances

Differences where actual costs are higher than standard or expected costs in budgeting.

Cost Variance

The difference between the estimated cost of a project or production and the actual cost incurred.