Which of the following statements is true? Multiple Choice The spending variance for a fixed expense will equal zero when the planned level of activity equals the actual level of activity. The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense. The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is less than the actual amount of the expense. The spending variance for a fixed expense can be favorable or unfavorable depending on whether the actual expense is greater than or less than the planned expense.
Which of the following statements is true? Multiple Choice The spending variance for a fixed expense will equal zero when the planned level of activity equals the actual level of activity. The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense. The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is less than the actual amount of the expense. The spending variance for a fixed expense can be favorable or unfavorable depending on whether the actual expense is greater than or less than the planned expense.
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 7MC: When is the material price variance unfavorable? A. when the actual quantity used is greater than...
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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.
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