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

question 106

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 sales price was higher than the expected sales 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:

Systematic Risk

Systematic risk refers to the overall risk affecting the entire market or market segment, making it unavoidable through diversification.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio.

Idiosyncratic Risk

The risk associated with an individual asset, which can be mitigated through diversification.

Systematic Risk

Systematic risk refers to the inherent risk that affects the entire market or a major market segment and cannot easily be mitigated through diversification.