An Unfavorable Flexible Budget Variance in Variable Costs Suggests A(n)________

question 147

Multiple Choice

An unfavorable flexible budget variance in variable costs suggests a(n) ________.

• A) increase in sales price per unit
• B) decrease in sales volume
• C) increase in variable cost per unit
• D) decrease in fixed costs

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Definitions:

Cash Payback Method

The cash payback method is a capital budgeting method that estimates the time required for a project to generate cash flows sufficient to recoup the initial investment.

Average Rate Of Return Method

An investment appraisal technique that calculates the expected return of an investment by averaging its annual profits and dividing by its initial cost.

Net Present Value Method

A method used in capital budgeting and investment planning that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Net Present Value Method

A financial analysis tool used to determine the attractiveness of an investment by calculating the present value of its future cash flows.