Management can get further insight in the reason of flexible-budget variance for direct-cost input variances when they subdivide them into ________ and spending variances.

Question

Quizplus · Accepted Answer

Subdividing direct-cost input variances into efficiency and spending variances can help management understand the reasons behind flexible-budget variances. Efficiency variance measures the difference between the actual and expected inputs needed to produce a unit of output, while spending variance measures the difference between the actual and expected prices paid for the inputs. This breakdown can help management identify which factors are driving the variances and take corrective action as needed. The other answer choices are not directly related to direct-cost input variances.

Management Can Get Further Insight in the Reason of Flexible-Budget