Q166
An actual cost is subtracted from flexible budget cost to calculate
A.
positive cost variance
B.
negative cost variance
C.
flexible budget variance
AnswerD.
flexible cost variance
Answer: Option C
Solution
Answer: Option C
Solution:
An actual cost is subtracted from flexible budget cost to calculate flexible budget variance. A flexible budget variance is any difference between the results generated by a flexible budget model and actual results. If actual revenues are inserted into a flexible budget model, this means that any variance will arise between budgeted and actual expenses, not revenues.