With an Activity Flexible Budget, a Budget Variance Is Calculated

question 168

Multiple Choice

With an activity flexible budget, a budget variance is calculated

• A)based on a flexible budget based on cost for actual units produced.
• B)based on a flexible budget based on various activity drivers for actual units produced.
• C)based on a flexible budget based on flexible manufacturing.
• D)based on a flexible budget based on committed resources for actual units produced.

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Definitions:

MRP of Labor

The Marginal Revenue Product of Labor, representing the additional revenue generated from hiring one more unit of labor.

Market Wage Rate

The prevailing rate of pay for work of a similar nature within a given labor market.

Hiring Labor

The process of finding, selecting, and employing people to work for wages or salaries.

Profit Maximizing

The mechanism through which a firm calculates the price and output level to maximize its profits.