Flexible budget variance is subtracted from actual cost to calculate

A. flexible budget cost

B. flexible investment cost

C. static budget cost

D. static variable cost

Answer: Option A

Solution(By Examveda Team)

Flexible budget variance is subtracted from actual cost to calculate flexible budget cost. A flexible budget is a budget that adjusts or flexes with changes in volume or activity. The flexible budget is more sophisticated and useful than a static budget. (The static budget amounts do not change. They remain unchanged from the amounts established at the time that the static budget was prepared and approved.)