Financial Planning Flashcards
7 cards from real CIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Planning flashcards as text
The sales price variance is calculated as:
Answer: (Actual price - Budgeted price) x Actual quantity sold
The price variance isolates the price difference applied to the units actually sold.
The direct materials quantity (usage) variance is valued at:
Answer: Standard price
Valuing usage differences at standard price keeps the quantity variance free of price effects.
In regression analysis used for forecasting costs, the coefficient of determination (R-squared) measures:
Answer: The proportion of variation in the dependent variable explained by the independent variable
R-squared indicates how well the independent variable explains changes in the dependent variable.
Under an 80% cumulative average-time learning curve, the first unit takes 100 hours. What is the total time for the first 2 units?
Answer: 160 hours
Average time for 2 units is 80 hours (100 x 80%), so total time is 160 hours.
Which situation most likely causes an unfavorable direct labor rate variance?
Answer: Using more highly paid, skilled workers than planned
Paying a higher wage rate than standard creates an unfavorable rate variance.
A planner tests how NPV changes when sales volume is varied while other inputs stay constant. This technique is:
Answer: Sensitivity analysis
Sensitivity analysis changes one variable at a time to see its effect on the outcome.
In time series forecasting, regular fluctuations that repeat within a year are called the:
Answer: Seasonal component
Seasonal variations recur at fixed intervals within a year, such as holiday sales peaks.