A $5,000 unfavorable spending-budget variance indicates that ________. A. the actual variable manufacturing overhead exceeded the flexible-budget amount by $5,000 B. the flexible-budget amount exceeded planned variable manufacturing overhead by $5,000 C. the planned variable manufacturing overhead exceeded the flexible-budget amount by $5,000 D. the flexible-budget amount exceeded actual variable manufacturing overhead by $5,000
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
A $5,000 unfavorable spending-
- A. the actual variable manufacturing
overhead exceeded the flexible-budget amount by $5,000 - B. the flexible-budget amount exceeded planned variable manufacturing overhead by $5,000
- C. the planned variable manufacturing overhead exceeded the flexible-budget amount by $5,000
- D. the flexible-budget amount exceeded actual variable manufacturing overhead by $5,000
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