Q164
Flexible budget variance is subtracted from actual cost to calculate
A.
flexible budget cost
AnswerB.
flexible investment cost
C.
static budget cost
D.
static variable cost
Answer: Option A
Solution
Answer: Option A
Solution:
Flexible budget variance is subtracted from actual cost to calculate flexible budget cost. A flexible budget is a budget that adjusts or flexes with changes in volume or activity. The flexible budget is more sophisticated and useful than a static budget. (The static budget amounts do not change. They remain unchanged from the amounts established at the time that the static budget was prepared and approved.)