If a Company Produces Fewer Units Than Expected, There Will

question 125

Multiple Choice

If a company produces fewer units than expected, there will be

• A) a favorable budget variance.
• B) an unfavorable spending variance.
• C) a favorable volume variance.
• D) an unfavorable volume variance.

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Definitions:

Spending Multiplier

The ratio of a change in national income to a change in government spending that causes it, indicating the impact of fiscal policy on the economy.

Long Run

A period of time in economics where all factors of production and costs are variable, and all market adjustments have been made.

Futures Contracts

Standardized legal agreements to buy or sell something at a predetermined future date and price, typically used for commodities or financial instruments.

Forward Contracts

Non-standardized contracts between two parties to buy or sell an asset at a specified future time at a price agreed upon today.