The flexible budget performance report directs management's attention to areas where: (Check all that apply.)Multiple select question.small flexible variances exist.small quantity variances exist.revenues differ substantially from budgeted amounts.costs differ substantially from budgeted amounts.
Question
The flexible budget performance report directs management's attention to areas where: (Check all that apply.)Multiple select question.small flexible variances exist.small quantity variances exist.revenues differ substantially from budgeted amounts.costs differ substantially from budgeted amounts.
Solution
The flexible budget performance report directs management's attention to areas where:
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Revenues differ substantially from budgeted amounts: This is true because a flexible budget performance report is designed to highlight areas where actual results deviate significantly from budgeted amounts. If revenues are substantially different from what was budgeted, it would be a point of concern for management.
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Costs differ substantially from budgeted amounts: This is also true for the same reasons as above. If costs are significantly higher or lower than what was budgeted, it would be a point of focus for management.
The flexible budget performance report does not necessarily focus on areas where small flexible variances or small quantity variances exist. The main purpose of this report is to highlight significant deviations from the budget, not minor ones.
Similar Questions
When preparing a performance report, flexing the budget is necessary in order to:Multiple choice question.adjust the budget at the beginning of the periodidentify the cost behavior pattern of the budgeted itemscalculate more accurate variancesadjust actual results so that they are closer to budgeted amounts
An advantage of a flexible budget is that it: A. considers only variable costs. B. incorporates adjustments caused by volume changes to better reflect performance. C. allows management freedom in meeting goals. D. allows comparison of actual costs to previous years' budgeted costs. E. minimises unfavourable budget variances.
Multiple Choice QuestionA flexible budget performance report indicates a sales variance of $200 unfavorable. The variance was likely caused by:Multiple choice question.selling units for more than the budgeted priceselling more units than budgetedselling units for less than the budgeted price
A report which presents overhead variance information along with variances from budgeted amounts is called a(n):Multiple choice question.variance report.overhead budget report.overhead variance report.overhead volume report.
A flexible budget has which of the following characteristics?Multiple select question.Useful for evaluating past performanceUseful to compare what-if scenariosAlways based on one level of activityOften based on several levels of activityIs the same as the master budget
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