________ variances are calculated by comparing the master budget to the flexible budget,and ________ variances are calculated by comparing actual costs to the flexible budget (not the master budget).
A)Volume;volume
B)Volume;spending
C)Spending;volume
D)Spending;spending

Question

Quizplus · Accepted Answer

Volume variances are related to changes in the level of activity, whereas spending variances are related to changes in the cost of resources used. Therefore, comparing actual costs to the flexible budget (not the master budget) would provide insight into spending variances. Calculating variances by comparing the master budget to the flexible budget would provide insight into volume variances.

________ Variances Are Calculated by Comparing the Master Budget to the Flexible