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
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
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
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
A revenue variance is the ______
difference between what revenue should have been at the actual level of activity and the actual revenue
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