Zhongfang Consumer Products Has a Small Car Division That Operates

question 93

Multiple Choice

Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. $$\begin{array} { | l | r | r | r | r | r | l | } \hline & & & \text { Flexible Budget } & & & \\\hline & { \text { Actual } } & \text { Flexible Budget } & \text { Variance } & \text { U/F } & \text { \% variance } & \text { U/F } \\\hline \text { Sales Revenue } & \$ 688,000 & \$ 700,000 & & & & \\\hline \text { Variable expenses } & 309,000 & 320,000 & & & & \\\hline \text { Contribution margin } & 379,000 & 380,000 & & & & \\\hline \text { Traceable fixed expenses } & 371,000 & 368,000 & & & & \\\hline \text { Division margin } & \$ 8,000 & \$ 12,000 & & & & \\\hline\end{array}$$
- How much is the percentage variance for traceable fixed expenses?

• A) 0.8 % F
• B) 0.8 % U
• C) 0.3 % U
• D) 0.3 % F

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Definitions:

Debt Investments

Investments made by purchasing bonds or other debt instruments, offering returns in the form of regular interest payments.

IFRS And ASPE

International Financial Reporting Standards and Accounting Standards for Private Enterprises are guidelines for financial accounting.

Equity Method

The equity method is an accounting technique used by a company to record its investment in another company when it has significant influence but not full control, typically between 20% and 50% ownership.

Significantly Influenced

A condition where an investor has a considerable but not controlling interest in another company, able to affect its policies without direct control.