Reference no: EM132867106

Question 1: What does a favorable cost of sales variance that includes an unfavorable cost volume variance mean in gross profit analysis?

Option 1: The production department was able to control costs within the budget but the purchasing department went over the budget.

Option 2: The purchasing department was able to control costs within the budget but the production department over the budget.

Option 3: The production and purchasing department were able to control costs within the budget.

Option 4: The production and purchasing departments went over the budget.

Question 2: If the cost variance is zero, it means that the manufacturing management was:

Option 1: able to control production cost below budgeted costs.

Option 2: able to control production costs at budgeted costs.

Option 3: unable to keep production costs at budgeted costs.

Option 4: unable to keep production costs at budgeted costs even if the purchasing department was able to keep the budgeted price.