Managerial ACCT Ch 9

The spending variance is labeled as favorable when the ______.

actual cost is less than what the cost should have been at the actual level of activity

One option to generate a favorable ______ variance for net operating income is to increase the number of clients.

activity

A spending variance is the ______

difference between what a cost should have been at the actual level of activity and the actual amount of the cost

A revenue variance is the ______

difference between what revenue should have been at the actual level of activity and the actual revenue

Using multiple cost drivers on a flexible budget report will generally ______

increase accuracy

Variances are more accurate when using ______

multiple cost drivers

When comparing the static planning budget to actual activity, a problem that arises when actual activity is higher than budgeted activity is that ______.

net income is higher than expected but all or most expense variances are unfavorable

A cost center's performance report does not include ______

net operating income

The difference between what the total sales should have been, given the actual level of activity for the period, and the actual total sales is a(n) ______ variance.

revenue

If the actual cost is greater than what the cost should have been, the variance is labeled as

unfavorable

The prominent difference between performance reports in nonprofit and for-profit organizations is that nonprofit organizations ______

usually receive significant funding from sources other than sales

A performance report shows that the planning revenue was $240,000, the flexible budget revenue was $225,000, and actual revenue was $230,000. The activity variance is

$15,000 Unfavorable

Fancy Nails' budgeted revenue is $20 per manicure. The planning budget for June was based on 2,400 manicures. During June, the actual revenue was $49,750 for 2,500 manicures. The revenue variance for June is ______.

$250U

A performance report shows that the planning revenue was $200,000, the flexible budget revenue was $225,000, and actual revenue was $223,000. Which of the following statements are true?

- The revenue variance is $2,000 Unfavorable. - The activity variance is $25,000 Favorable.

A cost center's performance report does not include ______.

- revenue - net operating income

Options to generate a favorable revenue and spending variance include _____

-increase operating efficiency -protecting the selling price -reduce the prices of inputs

Options to generate a favorable revenue and spending variance include ______.

-increase operating efficiency -reduce the prices of inputs -protecting the selling price

The flexible budget performance report consists of ______

-the planning budget, flexible budget and actual results -activity variances -revenue and spending variances

Nonprofit organizations ______

-usually have significant funding sources other than sales -may have revenue sources that are fixed

activity variance- subtract planning budget from flexible budget

Revenue and spending variances- Subtract flexible budget from actual results

The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a(n) _______ variance.

Spending

Performance reports for cost centers ______

do not include revenues or net income

The flexible budget ________ report combines activity and revenue and spending variances

performance