Question

A company is analyzing its month-end results by comparing it to both static and flexible budgets. During the month, the actual variable costs 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 costs

(B) favorable sales volume variance for variable costs

(C) unfavorable flexible budget variance for variable costs

(D) unfavorable sales volume variance for variable costs

Answer 1

Answer:

(A) favorable flexible budget variance for variable costs

Explanation:

As in the given case, the question is talking about the variable cost per unit that lead to the flexible budget variance instead of the sales volume variance

Since in the given scenario, the actual variable costs per unit were lower than the expected variable costs per unit that reflects the favorable and if the actual variable costs per unit were higher than the expected variable costs per unit so it would reflect the unfavorable variance