A flexible-budget variance can be decomposed into an efficiency variance and a rate variance.

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A flexible-budget variance can be decomposed into an efficiency variance and a rate variance. The efficiency variance measures the difference between the actual quantity of inputs used and the budgeted quantity of inputs for the actual output level, while the rate variance measures the difference between the actual input price paid and the budgeted input price for the actual quantity of inputs used.

A Flexible-Budget Variance Can Be Decomposed into an Efficiency Variance