Dorffman Inc

question 100

Multiple Choice

Dorffman Inc. has a $18,000 favorable flexible budget variance for May. Which of the following statements is true, if May's actual net operating income was $72,000?

• A) Dorffman's static budget must have showed a net operating income of $54,000.
• B) Dorffman's static budget must have showed a net operating income of $90,000.
• C) Dorffman's flexible budget must have showed a net operating income of $54,000.
• D) Dorffman's flexible budget must have showed a net operating income of $90,000.

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of the firm’s financial condition.

Accrued Revenues

Income generated but not yet received in cash or documented at the time of the statement.

Unearned Revenues

Money received by a company for goods or services that have not yet been delivered or performed.

Accrued Expenses

Expenses that have been incurred but not yet paid, typically recorded through adjusting journal entries in the accounting process.