14.5.2. Major Tools

Try these first

1. 1.

   What is budgeting?

   Hint

   Think about financial planning.

2. 2.

   Define variance analysis.

   Hint

   It assesses deviations.

3. 3.

   What does budgeting help organizations to do?

   • Plan finances
   • Track sales
   • Hire employees

   Hint

   Think of it as a financial plan.

4. 4.

   True or False: Variance analysis is only about financial losses.

   • True
   • False

   Hint

   Consider both profits and losses in analysis.

5. 5.

   A company is evaluating two products. Product A has a higher margin but lower sales volume. How would you use CVP analysis to assess which product is more profitable?

   Hint

   Focus on margin vs. sales volume.

6. 6.

   Consider a scenario where the estimated budget for a quarter shows a large unfavorable variance. Outline the steps to investigate and resolve this variance.

   Hint

   Look into both processes and adjustments.