The differences between actual andbudgeted figures are known astype your answer...2Which of the following is true aboutunfavorable variances?Managers generally investigate onlyunfavorable variances as part of"management by exception."Unfavorable variances will always benegative numbers when subtractingactual figures minus budgeted figures.O Unfavorable variances should always beinterpreted as “bad news" for thecompany.Unfavorable variances are variancesthat cause operating income to be lowerthan budgeted.

1. The difference between actual figures and budgeted figures are knows as Variance.

Answered: The differences between actual and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Although there are many reasons to this concern, one of the general reasons in gross profit variance analysis why an unfavorable sales volume variance occur is that the A. figures are not properly accounted for B. firm's product is not properly marketed C. accounts are taking too long to collect. D. finished product is overpriced E. raw materials used are overpriced
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A situation where a favourable variance may result is when actual operating income is less than the budgeted amount b. None of the answers. actual revenues exceed budgeted revenues d. budgeted contribution margin is more than the actual amount e. budgeted or standard costs are less than actual costs 16 10 90604
2.0p Which of the following statements about variances is correct? The sales-volume variance is due to using a different selling price from that budgeted. The sales-mix variance is favorable when the actual sales mix percentage is lower than the budgeted sales mix percentage. The sales-quantity variance is unfavorable when budgeted unit sales exceed actual unit sales. The sum of the sales-mix variance and the sales-quantity variance should equal the flexible-budget variance.
The principle of exceptions allows managers to focus on correcting variances between O a. competitor's costs and standard costs b. standard costs and actual costs O c. competitor's costs and actual costs d. variable costs and actual costs
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TRUE OR FALSE When actual production volume is less than expected volume, the production volume variance is unfavorable
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
In gross profit analysis, a favorable cost of sales variance that includes an unfavorable cost volume variance will mean: * a. The production department was able to control costs within the budget but the purchasing department went over the budget. b. The purchasing department was able to control costs within the budget but the production department over the budget. c. The production and purchasing department were able to control costs within the budget. d.The production and purchasing departments went over the budget.
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Variance analysis is an extremely important tool in accounting, so unfavourable variances must be taken very seriously by accountants and managers”. How would you respond to this statement? Make use of examples in your explanation - 150 words please :)
Which of the following statements is incorrect with regards to production variances? Select one: a. Direct material variances are concerned with both the purchasing and the production functions of a company’s manufacturing operations. b. Use of laborers with high hourly wage rates for production activities requiring low hourly wages rate laborers would result in an unfavorable labor rate variance. c. A favorable direct material price variance would yield a negative number. d. The direct labor rate variance and the direct labor efficiency variance add up to the total direct labor variance. e. The quantity used for a given level of output (standard quantity allowed) is used to determine the direct materials price variance. PreviousSave AnswersNext

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