A company is analyzing its month-end results by comparing it to both static and flexible budgets.During the month,the actual fixed costs were lower than the expected fixed costs as per the static budget.This difference results in a(n)________.
A) unfavorable flexible budget variance for fixed costs
B) favorable sales volume variance for fixed costs
C) favorable flexible budget variance for fixed costs
D) unfavorable sales volume variance for fixed costs

Question

Quizplus · Accepted Answer

The favorable flexible budget variance for fixed costs occurs when the actual fixed costs are lower than the expected fixed costs as per the flexible budget. This means that the company has saved money on fixed costs during the month, which is a positive outcome. The sales volume variance does not come into play when analyzing fixed costs, so options B and D are not correct. Option A is incorrect as a lower actual fixed cost than expected results in a favorable variance, not unfavorable.

A Company Is Analyzing Its Month-End Results by Comparing It