Question
When should period-end balances be used in a ratio?
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Answer
When both inputs are balance-sheet stocks.
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Question
Why is a cost variance favorable when actual is below budget?
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Answer
Lower cost improves income.
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Question
Why is a revenue variance favorable when actual exceeds budget?
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Answer
Higher revenue increases income.
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Question
How is variance defined for budget-vs-actual analysis?
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Answer
Actual minus budget.
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