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

question 14

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 variable costs per unit were lower than the expected variable costs per unit as per the static budget.This difference results in a(n) ________.

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

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Definitions:

Return on Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company's assets to create profits.

Gross Margin Percentage

A financial metric that represents the percentage of total sales revenue remaining after accounting for the cost of goods sold.

Return on Equity

A gauge of a business's earnings effectiveness, demonstrating the profitability produced per dollar invested by shareholders.

Return on Total Assets

A financial ratio that measures a company's ability to generate earnings from its assets.