A flexible-budget variance is $600 favorable for unit-related costs. This indicates that costs were ________.
A) $600 more than the master budget
B) $600 less than for the planned level of activity
C) $600 more than standard for the achieved level of activity
D) $600 less than standard for the achieved level of activity

Question

Quizplus · Accepted Answer

A flexible-budget variance compares actual costs to what the costs should have been based on the actual level of activity. A favorable variance means that costs were less than what they should have been based on the achieved level of activity. Therefore, choice D is correct.

A Flexible-Budget Variance Is $600 Favorable for Unit-Related Costs