The Difference Between the Flexible-Budget Operating Income and the Actual

question 177

Multiple Choice

The difference between the flexible-budget operating income and the actual operating income in a period is the:

• A) Sales mix variance.
• B) Sales volume variance.
• C) Sales price variance.
• D) Operating income flexible-budget variance.
• E) Total operating income variance.

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Definitions:

Operating Activities

Activities that relate directly to the business’s primary operations, such as selling goods and services, as opposed to investing or financing activities.

Statement Of Cash Flows

A financial report that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.

Cash Equivalents

Assets readily convertible to a known cash amount within a short period, typically 90 days.

Financing Activities

Transactions and events that affect long-term liabilities and equity of a company, including issuing debt, obtaining loans, or issuing and selling equity securities.