Flexible- Budget Variances Are Designed to Measure The

question 58

Multiple Choice

Flexible- budget variances are designed to measure the:

• A) effectiveness of operations at actual level of activity
• B) efficiency of operations at actual level of activity
• C) efficiency of operations at projected level of activity
• D) effectiveness of operations at projected level of activity

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales, such as rent or salaries.

Flexible Budget

A budget that adjusts or varies with changes in volume or activity levels.

Level Of Activity

Refers to the volume of production or operations within a business, which can impact costs and efficiency.

Fixed Costs

Expenses that do not change with the level of production or sales over a short period.