Which Is the Most Likely Cause of a Large Variance

question 21

Multiple Choice

Which is the most likely cause of a large variance between budget estimates and actual results if the company is well managed with efficient internal controls?

• A)Production is working inefficiently and using too much raw material
• B)The budget is unrealistic and cannot be met
• C)Inaccurate data has been recorded
• D)Raw materials are being stolen

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Definitions:

Seasonal Indexes

Numerical values used to adjust for seasonal effects in time series data, allowing for the comparison of data across different seasons.

Daily Indexes

Indicators or measures that are calculated and published every day to track the performance of specific markets or sectors.

Cyclical Effect

Phenomenon where certain patterns, trends, or behaviors recur over regular periods due to underlying seasonal or economic cycles.

Forecast Quarterly

The process of predicting future values of a variable or interest, such as sales or revenue, specifically for each quarter of a year.