At the End of 2009, SWP Prepared Its Master Budget

question 7

Multiple Choice

At the end of 2009, SWP prepared its master budget for 2010. Selected amounts from that budget, along with actual results for 2010, are presented below: The variance for cost of goods sold could be explained by

• A) Actual sales being greater than the budget
• B) Actual sales being less than the budget
• C) Price discounts for purchasing in bulk
• D) Decreases in raw material prices

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Definitions:

Planning Budget

A financial plan that estimates future revenues, expenses, and other financial needs for a specific period.

Customers Served

The total number of clients or customers that a business or facility has provided services or goods to within a specific period.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels within a business.

Customers Served

The number of individual clients or customers that a business has provided products or services to within a specific timeframe.