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:

Short-run Equilibrium

A state in a market where supply equals demand within a short-term period, leading to a stable price level temporarily.

Monopolistically Competitive

In a monopolistically competitive market, firms sell products that are not perfect substitutes for each other, leading to some degree of market power but with free entry and exit in the long run.

Positive Profit

A financial gain that occurs when the revenues from business activities exceed the expenses, costs, and taxes needed to sustain the operation.

Tangent

A straight line that touches a curve at a single point without crossing it at that point.