Flexible Budget Variance Is the Difference Between Expected Results in the Flexible

question 8

True/False

Flexible budget variance is the difference between expected results in the flexible budget for the actual units sold and the static budget.

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Definitions:

CVP Income Statement

A financial report that shows the effects of varying levels of sales and product costs on a company's net income.

Gross Profit

The financial measure representing the difference between sales revenue and the cost of goods sold before deducting administrative and selling expenses.

CVP Analysis

Cost-Volume-Profit Analysis; a financial tool used to determine the impact on an organization's profits due to changes in volume, costs, and prices.

Fixed Cost Per Unit

The portion of fixed costs attributed to each unit of production, which stays constant regardless of the level of production or sales volume.