A company is analyzing its month-end results by comparing it to both static and flexible budgets.During the month,the actual variable costs per unit were lower than the expected variable costs per unit as per the static budget.This difference results in a(n)________.
A) favorable flexible budget variance for variable costs
B) favorable sales volume variance for variable costs
C) unfavorable flexible budget variance for variable costs
D) unfavorable sales volume variance for variable costs

Question

Quizplus · Accepted Answer

The fact that the actual variable costs per unit were lower than the expected variable costs per unit as per the static budget means that the flexible budget, which adjusts to actual conditions, will show lower cost of goods sold (COGS) than the static budget. This results in a favorable flexible budget variance for variable costs.

A Company Is Analyzing Its Month-End Results by Comparing It