Analyzing the difference between a flexible budget and the actual results directs management’s attention to:

 Analyzing the difference between a flexible budget and the actual results directs management’s attention to:
 
multiple choice
actual amounts that differ greatly from budgeted amounts. Correct
actual amounts that do not differ greatly from budgeted amounts.
areas where only unfavorable variances exist.

Explanation
Knowledge Check 01
 
Analyzing the difference between a flexible budget and the actual results directs management’s attention to actual amount s that differ greatly from budgeted amounts. Both favorable and unfavorable variances should be investigated.

 If the actual cost is greater than the standard cost, what is the resulting variance.
 
multiple choice
Favorable
Unfavorable Correct

Explanation
Knowledge Check 01
 
The variance is unfavorable if the actual cost is greater than the standard cost.

 

After preparing a standard cost performance report, the next step is to:
 
multiple choice
Take corrective and strategic actions.
Identify questions and their answers.
Compute and analyze variances. Correct

Explanation
Knowledge Check 01
 
After preparing a standard cost performance report, the next step is to compute and analyze variances. After computing and analyzing variances, companies will identify questions and their answers and then they will take corrective and strategic actions.

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