Favorable flexible budget variances for costs may indicate that costs are well-managed.On the other hand,these same variances can indicate ________.
A)the company is spending too little for vital activities,such as maintenance of machines.
B)the company is cutting costs to drive up profits in the short run.
C)the company is cutting back on benefits offered to customers and employees.
D)all of the above

Question

Quizplus · Accepted Answer

Favorable flexible budget variances for costs can indicate that costs are well-managed, but they can also suggest that the company is under-spending on essential activities, cutting costs to boost short-term profits, or reducing benefits, all of which can have negative long-term implications.

Favorable Flexible Budget Variances for Costs May Indicate That Costs