) Ehrlich Corporation compares monthly actual operating results to a static budget prepared at the beginning of the month. When the actual level of activity is less than budgeted, which of the following would be true? Group of answer choices a. Variable costs would show unfavorable variances. b. Variable costs would show favorable variances. c. Fixed costs would show favorable variances. d. Fixed costs would show unfavorable variances.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
9)
Ehrlich Corporation compares monthly actual operating results to a static budget prepared at the beginning of the month. When the actual level of activity is less than budgeted, which of the following would be true?
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