Favorable Flexible Budget Variances for Costs May Indicate That Costs

question 85

Multiple Choice

Favorable flexible budget variances for costs may indicate that costs are well-managed.On the other hand,these same variances can indicate ________.

• A)the company is spending too little for vital activities,such as maintenance of machines.
• B)the company is cutting costs to drive up profits in the short run.
• C)the company is cutting back on benefits offered to customers and employees.
• D)all of the above

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Definitions:

Price Rise

An increase in the cost of goods or services, often equated with inflation but can also indicate a market adjustment due to supply and demand.

Quantity Fall

This term is not widely recognized as a standard economic or financial term. NO.

Dominant Strategy

A strategy in game theory that yields the highest payoff for a player no matter what the other players do.

Annual Profit

The total earnings a company makes in one fiscal year after all expenses and taxes have been subtracted from its total revenue.