Favorable and Unfavorable Variances Are Netted Together in the Same

question 127

True/False

Favorable and unfavorable variances are netted together in the same way debits and credits are.

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Definitions:

Master Budget

A document that integrates all the estimates from the different departments to establish guidelines and benchmarks for the whole organization.

Favorable Variance

A financial term indicating that actual spending was less than budgeted amounts, or revenue was higher than expected.

Fixed Overhead

Refers to the regular, static expenses of operating a business that are not affected by changes in production volume or sales.