What is the static budget variance of operating

This preview shows page 6 - 8 out of 59 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Discrete Mathematics With Applications
The document you are viewing contains questions related to this textbook.
Chapter 4 / Exercise 8
Discrete Mathematics With Applications
Epp
Expert Verified
14) What is the static-budget variance of operating income? A) $238,000 favorable B) $238,000 unfavorable C) $235,000 favorable D) $235,000 unfavorable Answer: Explanation: B) ActualStatic Static-budgetResultsBudgetVarianceUnits sold280,000275,000Revenues$3,080,000$3,300,000$(220,000)UVariable costs900,000885,000(15,000)UContribution margin $2,180,000$2,415,000235,000Fixed costs55,00052,0003,000UOperating income$2,125,000$2,363,000$238,000U
B
U
Diff: 3Objective: 1AACSB: Application of knowledge15) Regier Company had planned for operating income of $10 million in the master budget but actually achieved operating income of only $7 million.
BDiff: 2Objective: 1AACSB: Analytical thinking16) A master budget is called a static budget because it is developed around a single planned output level.
Diff: 1Objective: 1AACSB: Analytical thinking17) When considered in isolation, a favorable variance decreases operating income relative to the budgeted amount.
Diff: 2Objective: 1AACSB: Application of knowledge6
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Discrete Mathematics With Applications
The document you are viewing contains questions related to this textbook.
Chapter 4 / Exercise 8
Discrete Mathematics With Applications
Epp
Expert Verified
18) A variance is the difference between the actual cost for the current and expected (or budgeted) performance.
Diff: 2Objective: 1AACSB: Analytical thinking19) A favorable variance results when actual costs exceed budgeted costs.
Diff: 2Objective: 1AACSB: Analytical thinking20) Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated.
Diff: 1Objective: 1AACSB: Analytical thinking21) A favorable variance indicates that budgeted costs are less than actual costs.
Diff: 2Objective: 1AACSB: Analytical thinking22) A favorable variance should be ignored by management.
Diff: 1Objective: 1AACSB: Analytical thinking

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture