A $5,000 unfavorable flexible-budget variance indicates that ________.
A) the flexible-budget amount exceeded actual variable manufacturing overhead by $5,000
B) the actual variable manufacturing overhead exceeded the flexible-budget amount by $5,000
C) the flexible-budget amount exceeded standard variable manufacturing overhead by $5,000
D) the standard variable manufacturing overhead exceeded the flexible-budget amount by $5,000

Question

Quizplus · Accepted Answer

An unfavorable flexible-budget variance means that actual variable manufacturing overhead costs were higher than the flexible budget amount. Therefore, option B is the correct answer. Option A is opposite to the true meaning of an unfavorable variance. Option C includes the term "standard," which is not relevant to the variance calculation. Option D is the opposite of the true meaning of an unfavorable variance.

A $5,000 Unfavorable Flexible-Budget Variance Indicates That ________