A Company Is Analyzing Month-End Results Compared to Both Static

question 77

Multiple Choice

A company is analyzing month-end results compared to both static and flexible budgets. This month the actual selling price was higher than projected in the static budget. What kind of variance would that produce?

• A) Favorable flexible budget variance for sales revenues
• B) Favorable sales volume variance for sales revenues
• C) Unfavorable flexible budget variance for sales revenues
• D) Unfavorable sales volume variance for sales revenues

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Definitions:

Gross Profit

The difference between the revenue a company earns from selling goods or services and the cost of goods sold.

Financial Statements

Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and statement of cash flows.

Cash Discount

A deduction from the stated price of goods or services offered to buyers as an incentive for early payment.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including interest rates, repayment schedule, and other stipulations guiding the borrowing.