What may the variable overhead flexible-budget variance be further subdivided into?
A)Static-budget variance and sales-volume variance
B)Spending variance and the efficiency variance
C)Sales-volume variance and the spending variance
D)Price variance and the efficiency variance

Question

Quizplus · Accepted Answer

The variable overhead flexible-budget variance can be subdivided into the spending variance and the efficiency variance. The spending variance measures the difference between actual variable overhead costs and the flexible budget based on actual volume. The efficiency variance measures the difference between the flexible budget based on actual hours of input and the flexible budget based on standard hours. There is no mention of static budget variance or sales-volume variance in relation to the variable overhead flexible-budget variance. The price variance is associated with direct materials and direct labor, not variable overhead.

What May the Variable Overhead Flexible-Budget Variance Be Further Subdivided