The direct materials flexible budget variance can be divided into two variances-the

Question

Quizplus · Accepted Answer

The direct materials flexible budget variance can be separated into a price variance (the difference between actual and budgeted price) and a quantity variance (the difference between actual and budgeted quantity). Therefore, option C, which defines the flexible budget variance as consisting of a price variance and a quantity variance, is the correct answer. Option A is incorrect because the rate variance does not exist. Option B is incorrect because the standard variance is not a recognized variance. Option D is incorrect because the efficiency variance is a term used in conjunction with the direct labor budget variance, not the direct materials flexible budget variance.

The Direct Materials Flexible Budget Variance Can Be Divided into Two