Rogstad Corporation Manufactures and Sells a Single Product

question 208

Multiple Choice

Rogstad Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,700 units, but its actual level of activity was 6,670 units. The company has provided the following data concerning the formulas to be used in its budgeting:

-The activity variance for net operating income in March would be closest to:

• A) $393 U
• B) $2,963 U
• C) $2,963 F
• D) $393 F

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Definitions:

Net Cash Flow

The amount of cash generated or lost by a company in a given period, considering cash inflows and outflows from operating, investing, and financing activities.

Accounts Receivable

The total amount of money owed to a company by its customers for goods or services delivered or used but not yet paid for.

Inventories

Tangible property held for sale in the ordinary course of business, in the process of production for such sale, or to be currently consumed in the production of goods or services.

Accounts Payable

Money owed by a company to its creditors for products and services that have been received but not yet paid for.