A company is analyzing its month-end results by comparing it to both static and flexible budgets. During the previous month, the actual variable expenses per unit were lower than the expected variable costs per unit as per the static budget. This difference results in a(n):
A)favorable flexible budget variance for variable expenses.
B)favorable sales volume variance for variable expenses.
C)unfavorable flexible budget variance for variable expenses.
D)unfavorable sales volume variance for variable expenses.

Question

Quizplus · Accepted Answer

Since the actual variable expenses per unit were lower than the expected variable costs per unit as per the static budget, the flexible budget for variable expenses will also be lower than the static budget. This indicates a favorable flexible budget variance for variable expenses.

A Company Is Analyzing Its Month-End Results by Comparing It