Flexible budget variances are more useful for evaluating ________ than static budget variances.
A)fixed costs
B)variable costs
C)mixed costs
D)step costs

Question

Quizplus · Accepted Answer

Flexible budget variances are more useful for evaluating variable costs because they provide a better analysis of the actual costs incurred and the corresponding revenue generated. Variable costs change with changes in production levels; hence, static budgets become inefficient in reflecting the actual costs of production due to these changes. On the other hand, flexible budgets adapt to the changes in the production level and offer a way to compare the actual costs and revenue to expected levels at different production volumes.

Flexible Budget Variances Are More Useful for Evaluating ________ Than