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

question 34

Multiple Choice

A company is analyzing its month-end results by comparing it to both static and flexible budgets. During the previous month, the actual selling price was higher than the expected 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:

Profit Margin

The ratio of net profits to revenues for a company, indicating the efficiency at which it can convert revenue into profit.

Return on Investment

A financial ratio that calculates the gain or loss generated on an investment relative to the amount of money invested.

Investment Turnover

A financial ratio that measures the efficiency of a company's use of its investments in generating sales revenue.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.