Question
What does a flexible-budget variance measure?
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Answer
Actual results minus the flexible budget; it measures efficiency or price effects.
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Question
What does a sales-volume variance measure?
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Answer
The effect of actual volume differing from planned volume.
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Question
Why is regression analysis useful in forecasting?
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Answer
It estimates relationships between outcomes and their drivers.
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Question
When is the percentage-of-sales method most useful?
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Answer
For pro forma statements and external financing needs.
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