Why Is the Budget Variance the Real Control Variance, for Fixed

question 73

Multiple Choice

Why is the budget variance the real control variance, for fixed overhead?

• A) It compares budgeted expenditures with budgeted fixed overhead costs.
• B) It compares actual expenditures with budgeted fixed overhead costs.
• C) It compares actual expenditures with budgeted variable overhead costs.
• D) It compares the static budget with the flexible budget.

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Definitions:

Price of X

The price of X refers to the cost to buyers of acquiring a unit of good or service X in the market.

Price of Y

the cost associated with acquiring or purchasing a specific good or service, denoted symbolically as "Y".

Wage Rate

The amount of money paid to an employee per unit of time, often per hour or year.

Labor Supply

The total number of hours that workers are willing and able to work at a given wage rate.