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.
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.
Which of the following is true?
| a. |
The Flexible |
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| b. |
The Flexible Budget Variance for operating income is calculated by taking the actual operating income minus the flexible budget operating income. |
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| 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 |
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| b. |
Actual unit costs times budgeted quantities of output |
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| c. |
Budgeted unit costs times budgeted quantities of output |
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| d. |
Actual unit costs times actual quantities of output |
A Favorable Variance results when (check all that apply)
| a. |
Actual costs exceed Budgeted costs |
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| b. |
Budgeted costs exceed Actual costs |
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| c. |
Actual revenues exceed Budgeted revenue |
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| d. |
Budgeted revenue exceed Actual revenues |
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