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

question 181

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 volume was lower than the expected sales volume as per the static budget.This difference results in an unfavorable ________.

• A) flexible budget variance for variable costs
• B) sales volume variance for variable costs
• C) flexible budget variance for sales revenue
• D) sales volume variance for sales revenue

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Definitions:

Indirect Expense

refers to expenses that are not directly associated with the production of goods or services, such as utility costs, rent, and administration salaries.

Gross Profit

The difference between revenue and the cost of goods sold, representing the basic profitability of a company's products or services.

Sports Apparel

Clothing and accessories designed for sports and physical activities.

Depreciation

The allocation (spreading) of the cost of an asset (such as an auto or equipment) over its expected useful life.