Variance Analysis Quiz

What is the purpose of variance analysis in a hospitality business?

• To manage customer satisfaction

• To analyze market trends

• To monitor and control revenue and expenses

• To calculate profit and loss

What does a favorable variance indicate?

• No impact on the business

• Performance better than budget

• Actual results did not meet the budget expectations

• Significant investigation required

In variance analysis, what is considered a significant variance?

• Variances that warrant further investigation due to their impact on the business

• Only favorable variances

• Variances that are within 5% of the budgeted amount

• Any difference between actual and budgeted results

What is the formula to calculate expense variance in dollars?

• Actual Expense x Budgeted Expense = Variance

• Variance/Budgeted Expense = Variance Percentage

• Variance/Actual Expense = Variance Percentage

• Actual Expense - Budgeted Expense = Variance

If the cost of goods rose from $85,000 to $97,750, what is the percentage variance for the cost of goods expense?

• 20%

• 5%

• 15%

• 10%

What is the activity driver in variance analysis?

• The dollar value per unit

• The number of units/quantity

• The percentage difference from budgeted results

• The impact on the business

What is a variance in the unit rate called?

• Volume variance

• Expense variance

• Cost variance

• Price variance

What do cost and volume variances have a direct relationship to?

• Customer satisfaction

• Sales, revenue, and profit

• Budgeted results

• Market trends

What should a manager consider when deciding which variances are significant?

• Only large dollar amounts

• Only large percentage differences

• Their knowledge of operations and company policy

• Only small dollar amounts

What is a variance in the activity driver called?

• Expense variance

• Volume variance

• Price variance

• Cost variance