What May the Variable Overhead Flexible-Budget Variance Be Further Subdivided

question 68

Multiple Choice

What may the variable overhead flexible-budget variance be further subdivided into?

• A)Static-budget variance and sales-volume variance
• B)Spending variance and the efficiency variance
• C)Sales-volume variance and the spending variance
• D)Price variance and the efficiency variance

Estimate net operating income based on given sales data and fixed and variable expense structures.

Understand the effect of changes in selling price, variable costs, fixed costs, and sales volume on net operating income.

Determine and evaluate the margin of safety in both percentage and dollar terms.

Analyze the impact of marketing and operational decisions on net operating income.

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Definitions:

Greatest Source of Funds

Typically refers to the primary means or largest contributor of operational or investment capital within an organization or economy.

Sale of Inventory

The process of selling the goods that a company manufactures or purchases to sell in the normal course of doing business.

Increase in Long-term Debt

An increase in long-term debt indicates a company has borrowed more funds that are due for repayment beyond the next twelve months.

Acquisition of Fixed Assets

The process of obtaining physical assets that are expected to be used in producing goods or services for a period longer than one fiscal year.