Which of the following is correct: Sales activity (volume) variance is used to m
ID: 2578281 • Letter: W
Question
Which of the following is correct:
Sales activity (volume) variance is used to measure effectiveness and flexible budget variance is used to measure efficiency.
Flexible budget variance is used to measure both effectiveness and efficiency.
Sales activity (volume) variance is used to measure both efficiency and effectiveness.
Sales activity (volume) variance is used to measure efficiency and flexible budget variance is used to measure effectiveness.
a.Sales activity (volume) variance is used to measure effectiveness and flexible budget variance is used to measure efficiency.
b.Flexible budget variance is used to measure both effectiveness and efficiency.
c.Sales activity (volume) variance is used to measure both efficiency and effectiveness.
d.Sales activity (volume) variance is used to measure efficiency and flexible budget variance is used to measure effectiveness.
Explanation / Answer
Option A is correct
Sales activity. (volume) variance is used to measure effectiveness. (The difference between the static budget sales amount and flexible budget sales amount is a measure of sales volume variance, known as EFFECTIVENESS)
Flexible budget variance is used to measure efficiency(management compare actual results achieved to flexible budget based on actual volume of activity, known as measure of EFFICIENCY)
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