The budget variance arises from a comparison of:
A)budgeted ﬁxed overhead expenditures with budgeted ﬁxed overhead costs.
B)actual ﬁxed overhead costs with budgeted ﬁxed overhead costs.
C)actual variable overhead expenditures with budgeted variable overhead costs.
D)variable overhead costs with budgeted ﬁxed overhead costs.
E)static-budget amounts with ﬂexible-budget amounts.

Question

Quizplus · Accepted Answer

The budget variance is the difference between actual costs and budgeted costs. Therefore, the comparison should be between actual fixed overhead costs and budgeted fixed overhead costs. Choice A is incorrect because it compares budgeted expenditures with budgeted costs. Choice C is incorrect as it compares actual variable overhead expenditures with budgeted variable overhead costs. Choice D is incorrect because it compares variable overhead costs with budgeted fixed overhead costs. Finally, choice E is incorrect because it compares two different types of budgets and not actual costs with budgeted costs.

The Budget Variance Arises from a Comparison Of