Which of the Following Describes the Difference in Operating Profits

question 6

Multiple Choice

Which of the following describes the difference in operating profits from the flexible budget to the master budget results from the difference between budgeted sales volume and actual sales volume?

• A)the margin of safety.
• B)a profit-volume variance.
• C)a sales volume variance.
• D)a differential volume variance.

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Definitions:

Equity

The ownership interest held by shareholders in a corporation, calculated as total assets minus total liabilities.

Liability

A financial obligation or debt that a company owes to others, which must be settled over time through the transfer of assets or services.

Asset

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Expense

Money spent or cost incurred in an entity's efforts to generate revenue, representing the cost of doing business.