A Company Is Analyzing Its Month-End Results by Comparing It

question 31

Multiple Choice

A company is analyzing its month-end results by comparing it to both static and flexible budgets.During the month,the actual sales price was higher than the expected sales price as per the static budget.This difference results in a(n) ________.

• 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:

Tax Deductions

Expenses that can be subtracted from gross income to reduce taxable income and overall tax liability.

Half-Year Convention

The half-year convention is a tax and accounting principle that allows for depreciation of assets to be calculated as if they had been in service for half a year, regardless of when they were actually acquired during the fiscal year.

Corporate Tax Rate

The share of a company's earnings required to be paid to the government as tax.

Straight Line

A method of calculating depreciation of an asset, where the asset's cost is evenly spread over its useful life.