An actual cost is subtracted from flexible budget cost to calculate ____________?
Correct answer: D. flexible budget variance
- A. positive cost variance
- B. negative cost variance
- C. flexible cost variance
- D. flexible budget variance
Explanation
Comparing actual cost with the cost allowed by the flexible budget measures the flexible-budget variance. For costs, subtracting actual cost from flexible-budget cost presents a favorable variance as positive.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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