Given a flexible budget variance of $95,000 and actual costs amounting to $40,000, what is the value of the flexible budget cost?

Multiple choice question for Direct Cost Variances and Management Control. Select an option, then review the explanation below.

Explanation

The flexible budget cost is calculated by adding the flexible budget variance ($95,000) to the actual cost ($40,000), resulting in $135,000. Since the variance is unfavorable, the correct flexible budget cost is $55,000.

Practice related questions from the same subject.

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4.What term is used to describe the anticipated performance of a company?
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Given a flexible budget variance of $95,000 and actual costs amounting to $40,000, what is the value of the flexible budget cost?

Explanation

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