An Unfavorable Flexible-Budget Variance for Variable Costs May Be the Result

question 60

Multiple Choice

An unfavorable flexible-budget variance for variable costs may be the result of ________.

• A) using more input quantities than were budgeted
• B) paying lower prices for inputs than were budgeted
• C) selling output at a higher selling price than budgeted
• D) selling less quantity compared to the budgeted

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Definitions:

Revenues

The income that a business receives from its normal business activities, typically from the sale of goods and services to customers.

Expenses

The outflows or other using up of assets or incurring of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities.

Reportable Segments

Segments of a business that must be disclosed separately in the company's financial reports due to their significant revenue, profitability, or other factors according to accounting standards.

Operating Profit

Earnings before interest and taxes (EBIT), calculated by subtracting operating expenses from gross profit.