A Favorable Flexible Budget Variance for Variable Expenses Would Indicate

question 32

Multiple Choice

A favorable flexible budget variance for variable expenses would indicate that:

• A)fewer units were actually sold than the company had anticipated.
• B)actual variable expenses of the company were less than the flexible budget variable expenses.
• C)more units were actually sold than the company had originally budgeted to sell.
• D)actual variable expenses were higher than the flexible budget variable expenses.

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Definitions:

Natural Variation

Refers to the inherent fluctuations in processes and measurements that occur even under stable conditions.

Process Capability Analysis

A statistical technique to determine how well a process can produce output within preset specification limits.

Common Causes

Factors or conditions that are frequently responsible for variations in a process or system, as opposed to special or unique causes.

Special Causes

refer to uncommon, non-random sources of variation in a process, distinguishing them from normal or common causes of variation.