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The master budget is an example of a
Static budget
A favorable variance is a variance that
increases operating income relative to the budgeted amount
The direct materials quantity variance is part of the direct materials flexible budget variance is caused by
Using more or less material than the standard quantity allowed for actual production
Which of the following is a possible reason why actual prices might differ from standard prices, resulting in a direct materials price variance
The vendors may change their prices as a result of changes in the market
If a company uses more direct labor hours than the standard allowed, the result is
A reduction in operating income
Why do variances have little meaning until their causes are identified
Because identifying their causes allows managers to take correct acition
If the actual wage rate is $4.50 per direct labor hour, but the standard wage rate is $4.70 per direct labor hour, the direct labor
Rate variance will be favorable
Note
Flashcard