In June, demand for X Company s product was surprisingly weak, and actual sales

Question

In June, demand for X Company s product was surprisingly weak, and actual sales and production were less than budgeted sales and production. As a result,

Question 1 options:

for fixed costs, flexible budget variances were less favorable than static budget variances.

for fixed costs, flexible budget variances were more favorable than static budget variances.

for variable costs, flexible budget variances were less favorable than static budget variances.

for variable costs, flexible budget variances were more favorable than static budget variances.

for fixed costs, flexible budget variances were less favorable than static budget variances.

for fixed costs, flexible budget variances were more favorable than static budget variances.

for variable costs, flexible budget variances were less favorable than static budget variances.

for variable costs, flexible budget variances were more favorable than static budget variances.

Explanation / Answer

When actual sales are less than budgeted sales, flexible variance will be unfavorable. static budget variance

Hence, out of given options, third option is correct.

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