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

question 181

Multiple Choice

A company is analyzing its month-end results by comparing it to both static and flexible budgets.During the month,the actual sales volume was lower than the expected sales volume as per the static budget.This difference results in an unfavorable ________.

• A) flexible budget variance for variable costs
• B) sales volume variance for variable costs
• C) flexible budget variance for sales revenue
• D) sales volume variance for sales revenue

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Definitions:

Current Year

The ongoing year or the present year being referenced.

Absorption Costing

Absorption costing is a costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Manufacturing Costs

Expenditures that are directly tied to the production of goods, including raw materials, labor, and overhead expenses.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.