The Flexible Budget Variance Is the Difference Between

question 141

Multiple Choice

The flexible budget variance is the difference between

• A)the static budget and the flexible budget.
• B)the flexible budget and actual results.
• C)the actual quantity and budgeted quantity.
• D)the actual price and the standard price.

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Definitions:

Binding Price Ceiling

A legally established maximum price for a good or service that is lower than the equilibrium price, leading to shortages.

Price Floor

A government or regulatory-imposed minimum price below which a good or service cannot legally be sold, intended to protect producers.

Binding Price Floor

A government-imposed price control that sets a minimum price for a good or service, which is above the equilibrium price, causing a surplus.

Excess Supply

A situation in a market where the quantity of a product offered for sale by producers exceeds the quantity demanded by consumers at a current price, leading to potential downward pressure on prices.