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

question 61

Multiple Choice

A company is analyzing its month-end results by comparing it to both static and flexible budgets.During the month,the actual fixed costs were lower than the expected fixed costs as per the static budget.This difference results in a(n) ________.

• A) unfavorable flexible budget variance for fixed costs
• B) favorable sales volume variance for fixed costs
• C) favorable flexible budget variance for fixed costs
• D) unfavorable sales volume variance for fixed costs

---

Definitions:

Process Costing

An accounting method that accumulates direct and indirect costs of a continuous production process and assigns them to individual units of output.

Conversion Cost

The combination of labor and manufacturing overhead costs required to convert raw materials into finished goods.

Conversion Costs

The combined costs of direct labor and manufacturing overhead, which are incurred to convert raw materials into finished goods.

FIFO Method

"First In, First Out," an inventory valuation method where goods first purchased or produced are sold first, affecting inventory cost and profits.