Assume that actual sales results exceed the planned results for the second quarter. This favorable difference is greater than the unfavorable difference reported for the first quarter sales. Which of the following statements about the sales budget report on June 30 is true?
A) The year-to-date results will show a favorable difference.
B) The year-to-date results will show an unfavorable difference.
C) The difference for the first quarter can be ignored.
D) The sales report is not useful if it shows a favorable and unfavorable difference for the two quarters.

Question

Quizplus · Accepted Answer

Since actual sales results exceeded the planned results for the second quarter and the favorable difference is greater than the unfavorable difference reported for the first quarter, the year-to-date results will show a favorable difference. Therefore, choice A is the correct answer. Choice B is incorrect because the favorable difference in the second quarter would offset (or at least partially offset) the unfavorable difference reported in the first quarter. Choice C is incorrect because both the favorable and unfavorable differences should be considered in the year-to-date report. Choice D is incorrect because a sales report that shows both favorable and unfavorable differences can still provide useful information for analysis and decision-making.

Assume That Actual Sales Results Exceed the Planned Results for the Second