A flexible-budget variance is $800 favourable for unit-related costs.This indicates that costs were:
A)$800 less than the standard for the achieved level of activity.
B)$800 more than the standard for the achieved level of activity.
C)$800 more than the master budget.
D)$800 less than for the planned level of activity.

Question

Quizplus · Accepted Answer

A flexible-budget variance compares actual costs at the achieved level of activity with what was expected based on the flexible budget. A favorable variance indicates that actual costs were less than what was expected. Therefore, choice A is correct as it states that costs were $800 less than the standard for the achieved level of activity.

A Flexible-Budget Variance Is $800 Favourable for Unit-Related Costs