Zhongfang Consumer Products Has a Small Car Division That Operates

question 48

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. $\begin{array}{|l|r|r|c|l|l|l} \hline & {\text { Actual }} & \begin{array}{c}\text { Flexible } \\\text { Budget }\end{array} & \begin{array}{c}\text { Flexible } \\\text { Budget } \\\text { Variance }\end{array} & \text { U/F } & \text { \% Variance } & \text { U/F } \\\hline \text { Sales Revenue } & \$ 688,000 & \$ 700,000 & & & & \\\hline \text { Variable expenses } & 309,000 & 320,000 & & & \\\hline \text { Contribution margin } & 379,000 & 380,000 & & & \\\hline \text { Traceable fixed expenses } & 371,000 & 368,000 & & & & \\\hline \text { Division margin } & \$ 8,000 & \$ 12,000 & & & &\\\hline \end{array}$

How much is the percentage flexible budget 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:

Federal Income Taxes

Taxes levied by the federal government on individuals, corporations, and other entities based on their net income.

In Perpetuity

In perpetuity refers to an infinite amount of time, often used in finance to describe payments that continue forever.

Stock Warrants

Financial instruments that give the holder the right to purchase a company's stock at a specific price before a certain date.