The flexible budget variance is the difference between
A)The static budget and the flexible budget.
B)The flexible budget and actual results.
C)The actual quantity and budgeted quantity.
D)The actual price and the standard price.

Question

Quizplus · Accepted Answer

The flexible budget variance is the difference between the flexible budget and actual results. The flexible budget takes into account the actual level of activity, while the static budget is based on a fixed level of activity. Therefore, the flexible budget variance provides a better measure of performance than the static budget variance. Choice A is incorrect because the static budget is not used in calculating the flexible budget variance. Choice C is incorrect because it refers to a quantity variance, not a flexible budget variance. Choice D is incorrect because it refers to a price variance, not a flexible budget variance.

The Flexible Budget Variance Is the Difference Between