The Fixed Budget Performance Report of Millar & Associates for the Year

question 45

Multiple Choice

The fixed budget performance report of Millar & Associates for the year ended 30 June 2014 shows budgeted manufacturing costs of $390 000 and actual manufacturing costs of $410 000. The unfavourable variance of $20 000 must have been due to:

• A) cost factors.
• B) poor budgeting.
• C) lack of supervision of workers.
• D) cannot be determined from the information provided.

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Definitions:

Correlation

A measure of the relationship between two or more variables; the degree to which they change together.

Coefficient of Alienation

A statistical measure used to quantify the degree of relationship or non-relationship between two variables, often indicating the extent to which they are unrelated.

Unexplained Variance

The portion of the total variance in a dataset that is not accounted for by the statistical model.

Indirect Correlation

A relationship between two variables such that when one variable increases, the other variable tends to decrease, or vice versa, mediated by a third variable.