Which of the following statements concerning performance reports is incorrect? The activity level used to populate the flexible budget is based on the actual "units." A favorable sales revenue flexible budget variance would indicate that the actual sales price was higher than the sales price used in the master budget. All material flexible budget variances should be investigated. The master budget variance is equal to the sum of the volume variance plus the flexible budget variance. O The master budget and the flexible budget use different cost behavior equation to calculate budgeted expenses.

Which of the following statements concerning performance reports is incorrect? The activity level used to populate the flexible budget is based on the actual "units." A favorable sales revenue flexible budget variance would indicate that the actual sales price was higher than the sales price used in the master budget. All material flexible budget variances should be investigated. The master budget variance is equal to the sum of the volume variance plus the flexible budget variance. O The master budget and the flexible budget use different cost behavior equation to calculate budgeted expenses.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 1CMA: When compared to static budgets, flexible budgets: a. offer managers a more realistic comparison of...

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When compared to static budgets, flexible budgets: a. offer managers a more realistic comparison of budgeted and actual fixed cost items under their control. b. provide a better understanding of the capacity (volume) variances during the period being evaluated. c. encourage managers to use less fixed cost items and more variable cost items that are under their control. d. offer managers a more realistic comparison of budgeted and actual revenue and cost items under their control.
The budget variance for variable production costs is broken down into quantity and price variances. Explain why the quantity variance is more useful for control purposes than the price variance.
This variance is the difference involving spending less, or using less than the standard amount. A. favorable variance B. unfavorable variance C. no variance D. variance
hich of the following statements is true? A budget reconciliation report shows the difference between actual profit and budgeted profit and does not show the other variances. Comparing the flexible budget to the as-if budget isolates a change in input price (e.g. budgeted input price vs. actual input price). Sales quantity (budgeted sales volume vs. actual sales volume) is the only item which differs between the master budget and the flexible budget. Activity-based costing is not used to evaluate customer profitability.
Which of the following statements is true? I. A revenue variance is unfavorable if the revenue in the static planning budget is less than the revenue in the flexible budget. II. A favorable spending variance occurs when the actual cost is less than the amount of the cost in the static planning budget. III. A revenue variance is favorable if the actual revenue is greater than the revenue in the static planning budget. Multiple Choice O Only statement III is true. All of the statements are true. Only statement I is true. None of the statements are true.
Which ONE of the following is true? a. Assume all costs are fixed when creating a flexible budget b. None of the other available answers are true c. There can only be one cost driver d. Unfavorable activity variances for costs will typically accompany a favorable activity variance for revenue. e. Variances are classified according to the impact on revenue f. Assume all costs are variable when creating a flexible budget
Which of the following is true? a. The Flexible Budget Variance for operating income is calculated by taking the actual operating income minus the static budget operating income. b. The Flexible Budget Variance for operating income is calculated by taking the actual operating income minus the flexible budget operating income. c. The Flexible Budget Variance for operating income is calculated by taking the flexible budget operating income minus the actual operating income. Which of the following elements are used in calculating Costs in a Flexible Budget? a. Budgeted unit costs times actual quantities of output b. Actual unit costs times budgeted quantities of output c. Budgeted unit costs times budgeted quantities of output d. Actual unit costs times actual quantities of output A Favorable Variance results when (check all that apply) a. Actual costs exceed Budgeted costs b. Budgeted costs exceed…
The performance evaluation of a cost center is typically based on its a. sales volume variance. b. ROI. c. static budget variance. d. flexible budget variance.
Considering the variance analysis, which of the following statements is true? a. When there is favourable variance the actual profit is higher than the budgeted profit (lower costs than budgeted or higher income than budgeted.. b. When there is favourable variance the actual profit is lower than the budgeted profit (higher costs than budgeted or higher income than budgeted. c. None of the answers provided are true d. When there is adverse variance the actual profit is lower budgeted profit (lower costs than budgeted or lower income than budgeted. e. When there is adverse variance the actual profit is higher budgeted profit (higher costs than budgeted or lower income than budgeted.
Considering the variance analysis, which of the following statements is true? O a. When there is adverse variance the actual profit is lower budgeted profit (lower costs than budgeted or lower income than budgeted. O b. When there is adverse variance the actual profit is higher budgeted profit (higher costs than budgeted or lower income than budgeted. O c. When there is favourable variance the actual profit is higher than the budgeted profit (lower costs than budgeted or higher income than budgeted.. O d. When there is favourable variance the actual profit is lower than the budgeted profit (higher costs than budgeted or higher income than budgeted. O e. None of the answers provided are true
Which of the following statements is true? A) The spending variance for a variable expense will usually equal zero. B) The spending variance for a variable expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense. C) The spending variance for a variable expense will be favorable if the amount of the expense contained in the flexible budget is less than the actual amount of the expense. D) The spending variance for a variable expense can be favorable or unfavorable depending on whether the actual expense is greater than or less than the planned expense.
which formula is correct for budget variance. Please see below: * Static Budget Variance =(Static Budget-Actual) Flexible Budget Variance = (Flexible Budget-Actual) * Static Budget Variance =(Actual- Static Budget-) Flexible Budget Variance = (Actual- Flexible Budget) Please make it more clear do I need to subtract budget from actual or actual from budget?