CMA Foundation · Fundamentals of Business Economics and Management · Communication, Co-ordination, Collaboration, Monitoring and Control
Budgeted sales of Kaveri Traders for a month were ₹5,00,000 and actual sales were ₹4,60,000. Treating this as a control deviation, what is the variance and its percentage of the standard?
The variance is ₹40,000 adverse, equal to 8% of the budget. Actual sales fell short of the ₹5,00,000 standard by ₹40,000, and the percentage is computed on the standard, not on actual sales: 40,000 divided by 5,00,000.
- A₹40,000 favourable, 8%
- B₹40,000 adverse, 8%Correct
- C₹40,000 adverse, 8.7%
- D₹40,000 adverse, 80%
Explanation
Variance = 5,00,000 − 4,60,000 = ₹40,000. Actual sales are below budget, so it is adverse. Percentage of standard = 40,000/5,00,000 = 8%. Using actual sales as the base would wrongly give 8.7%.
Did you get it right without looking?
One question tells you little. A timed set on Communication, Co-ordination, Collaboration, Monitoring and Control shows your real accuracy, how long you take and where you lose marks.
More Communication, Co-ordination, Collaboration, Monitoring and Control questions
- A supervisor in a Kolkata factory gives instructions to a worker and never checks whether the worker has understood. Later the work is done …
- Two teams of an Indian IT firm each work well within themselves, but their software modules repeatedly fail to integrate because neither tea…
- In the management process, monitoring is best described as:
- A Mumbai logistics firm finds that managers receive 120 emails a day and miss critical ones. A consultant suggests ways to reduce this probl…
- A production manager at a Pune auto-parts firm uses heavy engineering jargon while briefing newly recruited machine operators, who fail to u…
- Ms. Iyer, a manager at a Bengaluru firm, already believes that a particular team member is careless, so she ignores his well-reasoned report…