A Flexible-Budget Variance for Any Fixed Cost

question 100

Multiple Choice

A flexible-budget variance for any fixed cost:

• A) Is defined as the difference between flexible-budget fixed cost and the level of fixed costs reflected in the master (static) budget.
• B) Is undefined, except when actual output equals budgeted output.
• C) Is typically zero, because the volume assumed in the flexible budget and the master budget for fixed costs is identical.
• D) Is the difference between budgeted fixed cost and actual fixed cost.
• E) Can be broken down into price and efficiency components.

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Definitions:

ITQs

Individual Transferable Quotas, a system used in fisheries management that allocates a certain quantity of fish that can be caught by each fisherman or company.

Efficient Use

Utilization of resources in a way that maximizes the output or benefits while minimizing waste, costs, or inefficiencies.

Own Quotas

Quantitative limits assigned to an individual or company regarding the amount of a particular good that can be produced, imported, or acquired, often used for regulation or protectionist purposes.

Overexploited

A condition where natural resources are consumed at a rate faster than they can replenish, leading to depletion or significant ecological damage.