The flexible budget variance for direct labor equals the labor price variance plus the labor quantity variance.

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This statement is true. The flexible budget variance for direct labor is calculated as the difference between the actual cost of direct labor and the budgeted cost of direct labor, based on the flexible budget. This variance can be further broken down into the labor price variance (the difference between the actual labor rate and the budgeted labor rate, multiplied by the actual quantity of labor hours) and the labor quantity variance (the difference between the actual quantity of labor hours and the budgeted quantity of labor hours, multiplied by the budgeted labor rate). Therefore, the flexible budget variance for direct labor can be expressed as the sum of the labor price variance and the labor quantity variance.

The Flexible Budget Variance for Direct Labor Equals the Labor