In: Accounting
True or false
7. Market analysis determines the profit contributed by market
segments of a company and can be analyzed using sales, cost and
expenses.......
18. in preparing an operating budget, generally the sales budget
begins the process because it estimates the expected level of
sales.....
27. A favorable variance is when the actual is greater than
standard.........
29. the total manufacturing cost variance is the difference between
the total standard costs and the total actual cost for the units
produced.......
45. Total variable cost remain the same in total dollar
amount........
48. the margin of safety indicates how much sales must decrease
before an operating loss occurs.......
7. True – The market segment profitablity is calculated with sales, cost and expenses. Variable costing approach is often used for market segment profitablity analysis.
18. True- Sales budget is the starting point for budget preparation. From sales budget, production budget is prepared based on inventory levels and then overheads budget.
27. False- A favorable variance is a variance when actual is less than standard. An unfavorable variances is a variance when actual is greater than standard.
29. True- Total manufacturing variance is calculated based on standard cost for actual production and actual cost.
45. False- Total variable cost increase or decrease in total amount depending on production or sales volume. Variable cost is constant at per unit level. Fixed cost is constant at overall level
48. True- Margin of safety is the difference between Actual sales – break even sales. If margin of safety is zero that is break even sales. At break even sales contribution is equal to fixed cost and there is no profit or no loss