The Sales Volume Variance Is the Difference Between Sales Revenue

question 63

True/False

The sales volume variance is the difference between sales revenue on the static budget and sales revenue on the flexible budget.

Recognize the impact of temporary differences on deferred tax assets and liabilities.

Identify how interperiod tax allocation affects income tax expense and effective tax rate.

Understand the basis of income tax expense calculation in financial statements.

Recognize the implications of deferred tax assets and liabilities on financial statement analysis.

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Definitions:

Variable Costs

Costs that change in proportion to the level of output or activity.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Economic Profits

Profits exceeding the total opportunity costs of a business, indicating it is outperforming its next best alternative.

Forgone Entrepreneurial Income

The potential income an entrepreneur misses out on when choosing to start their own business rather than working for wages.