US CMA Part 1 · Chapter 3 · Question 1 of 30
The static budget variance for operating income can be split into which two components?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A flexible budget variance and a sales volume variance
Explanation
The static budget variance compares actual results with the original budget. It splits into the sales volume variance (flexible budget minus static budget, caused by selling a different quantity) and the flexible budget variance (actual minus flexible budget, caused by prices, costs and efficiency).
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