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9 September, 01:15

Which of the following statements accurately describes a flexible budget variance?

A. The difference between a company's actual operating results and its master budget.

B. The difference between the company's actual operating results and the budgeted created for its actual level of activity.

C. The difference between the company's flexible budget and its master budget.

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Answers (1)
  1. 9 September, 01:21
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    Answer: Option B

    Explanation: In simple words, flexible budget variance refers to the difference between the results that were predicted by the flexible budget model and the actual results.

    Flexible budgets are not rigid and are made on some assumptions the difference arises due to variance in the level of variable expenses that were incorrectly predicted by the model.

    Hence the correct option is B.
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