The Total Variable Cost Flexible-Budget Variance for Any Given Period

question 166

Multiple Choice

The total variable cost flexible-budget variance for any given period:

• A)Is the difference between actual total variable cost incurred and master budgeted total variable cost.
• B)Is decomposable into sales-volume and sales-mix components.
• C)Is decomposable into production-volume and production-mix components.
• D)Can be broken down into flexible-budget variances for major costs such as materials,labor,variable overhead,and variable selling expenses.

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Definitions:

Production Budget

A Production Budget is an estimate of the number of units that must be manufactured to meet sales goals and, therefore, it details the cost of raw materials, labor, and other resources necessary for production.

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.

Units

Measurements or quantities of a product, item, or component, often used in inventory and production management.

Assumptions And Predictions

The process of making educated guesses or hypotheses about future events based on current or past information.