The process of determining the effect of price and quantity changes on revenues and expenses refers to:
A) accounting analysis.
B) variance analysis.
C) pro forma budgeting.
D) financial flexibility.

Question

Quizplus · Accepted Answer

Variance analysis involves analyzing the differences between actual results and planned/expected results. This includes analyzing the effect of price and quantity changes on revenues and expenses to understand the reasons behind any variances. Accounting analysis typically involves analyzing financial statements and transactions, rather than specifically focusing on price and quantity changes. Pro forma budgeting involves creating a budget based on projected future conditions, which may or may not involve analyzing the effect of price and quantity changes. Financial flexibility refers to a company's ability to adjust its financial structure and operations in response to changes in the business environment, but does not specifically relate to analyzing the effect of price and quantity changes on revenues and expenses.

The Process of Determining the Effect of Price and Quantity