ACC 350 WK 7 Quiz 5 Chapter 6 - All Possible Questions
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ACC 350 WK 8 Quiz 6 Chapter 7 - All Possible Questions
The master budget is one type of flexible budget.
A flexible budget is calculated at the start of the budget period.
Information regarding the causes of variances is provided when the master budget is compared with actual results.
A variance is the difference between the actual cost for the current and previous year.
A favorable variance results when budgeted revenues exceed actual revenues.
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.
The essence of variance analysis is to capture a departure from what was expected.
A favorable variance should be ignored by management.
An unfavorable variance may be due to poor planning rather than due to inefficiency.
The only difference between the static budget and flexible budget is that the static budget is prepared using planned output.
The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance.
The flexible-budget variance may be the result of inaccurate forecasting of units sold.
Decreasing demand for a product may create a favorable sales-volume variance.
An unfavorable variance is conclusive evidence of poor performance.
A company would not need to use a flexible budget if it had perfect foresight about actual output units.
The flexible-budget variance pertaining to revenues is often called a selling-price variance.
Cost control is the focus of the sales-volume variance.