A process of examining the differences between actual and budgeted costs and describing them in terms of the amounts that resulted from price and quantity differences is called:
A) Cost analysis.
B) Flexible budgeting.
C) Variable analysis.
D) Cost variable analysis.
E) Variance analysis.

Question

Quizplus · Accepted Answer

Variance analysis involves comparing actual costs to budgeted costs and analyzing the differences, known as variances. These variances can be further broken down into price variances (differences due to changes in the cost of inputs) and quantity variances (differences due to changes in the amount of inputs used). Therefore, variance analysis fits the description provided in the question.

A Process of Examining the Differences Between Actual and Budgeted