The static budget variance is equal to the sum of ________ and ________.
A) direct materials variance; direct labor variance
B) fixed overhead variance; variable overhead variance
C) flexible budget variance; activity-level variance
D) direct materials price variance; direct materials quantity variance

Question

Quizplus · Accepted Answer

The static budget variance is the difference between the actual results and the budgeted amount based on the original budget assumptions. This variance can be further broken down into the flexible budget variance (the difference between the actual results and the budgeted amount based on the actual level of activity) and the activity-level variance (the difference between the budgeted amount based on the actual level of activity and the budgeted amount based on the original assumptions). Therefore, the static budget variance is equal to the sum of flexible budget variance and activity-level variance.

The Static Budget Variance Is Equal to the Sum of ________