A Favorable Flexible Budget Variance for Variable Expenses Would Indicate

question 32

Multiple Choice

A favorable flexible budget variance for variable expenses would indicate that:

• A)fewer units were actually sold than the company had anticipated.
• B)actual variable expenses of the company were less than the flexible budget variable expenses.
• C)more units were actually sold than the company had originally budgeted to sell.
• D)actual variable expenses were higher than the flexible budget variable expenses.

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Definitions:

Crossover Rate

The discount rate at which two investment projects have the same Net Present Value (NPV), often used in capital budgeting.

Projects

Specific tasks or initiatives undertaken to achieve a particular goal, often requiring a significant amount of planning and work.

IRR Cross-Over Rate

The rate at which two projects have the same net present value (NPV) when considering their internal rate of return (IRR), used to choose between competing projects.

Annual Cash Flow

The total amount of money being transferred into and out of a business, measured yearly.