The static budget amount is subtracted from the flexible budget amount to calculate the __________?
Correct answer: A. sales budget variance
- A. sales budget variance
- B. cost budget variance
- C. resultant budget variance
- D. static budget variance
Explanation
Subtracting the static budget from the flexible budget isolates the effect of the change in activity or sales volume, commonly labelled sales budget variance in this question's terminology. It is not the flexible budget variance, which compares flexible budget with actual results.
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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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