The direct materials flexible budget variance can be divided into which of the following two variances? A. Quantity variance and the efficiency variance B. Price variance and the rate variance C. Price variance and the standard variance D. Price variance and the quantity variance

Question

Piper Mccullough

Business

5 February, 09:51

The direct materials flexible budget variance can be divided into which of the following two variances? A. Quantity variance and the efficiency variance B. Price variance and the rate variance C. Price variance and the standard variance D. Price variance and the quantity variance

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Answers (1)

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Camden Hurst · Answer 1

The correct answer is D. Price variance and the quantity variance.

Explanation:

Price systems generally vary according to supply and demand, the real price variation is obtained by a simple indicator called elasticity.

The variations indicate the degree to which a certain level of action established by management has been achieved. Variations can be grouped by department, by cost or by cost element. Like for example price and quantity. The degree to which a variation can be controlled depends on the nature of the standard, the cost involved and the particular circumstances that led to the variation.