The Static Budget Variance Is Equal to the Sum of ________

question 43

Multiple Choice

The static budget variance is equal to the sum of ________ and ________.

• A) direct materials variance; direct labor variance
• B) fixed overhead variance; variable overhead variance
• C) flexible budget variance; activity-level variance
• D) direct materials price variance; direct materials quantity variance

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Definitions:

Capital Budgets

Financial plans that allocate expenditures for acquiring and upgrading physical assets such as buildings and machinery.

Cash Outflows

The movement of money out of a business, project, or investment, typically related to expenses, purchases, or investments.

Cash Inflows

Money or assets that come into a company, typically through sales, financing, or investments.

NPV

Net Present Value, a calculation that represents the difference between the present value of cash inflows and the present value of cash outflows over a period of time.