1. omework: Assignment 7 Exercise Score: o of 10 pts Assignment score: 0% (0 of 100 pts) How
might a manager gain insight into the causes of a flexible-budget variance for direct materials?
OA. A flexible-budget variance for direct materials is based only on the price variance.
Therefore, a mana cause of this variance to gain insight and find ways to make improvements.
OB. A manager should subdivide the flexible-budget variance for direct materials into a price
vanance (tha between actual and budgeted quantities of direct materials used to produce actual
output) and an ef reflects the difference between the actual and budgeted prices of direct
materials). The individual caus then be investigated, recognizing possible interdependencies
across these individual causes oc. A manager should subdivide variance for direct materials into
a price variance (that the flexible-budget variance (that reflects the dif between actual and
budgeted prices of direct matarials) and an efficiency output). The individual causes actual and
budgeted quantities of direct materials used to produce actual then be investigated recognizing
possible interdependencies across these individual causes a mana CD, A flexible budget variance
for direct materials is based only on the efficiency variance Therefore, the cause of this variance
to gain insight and find ways to make improvements
Solution
Answer: (C)
A manager should subdivide the flexible budget variance for direct materials into a price
variance and an efficiency variance. The individual causes of these variances can then be
investigated recognizing possible interdependencies across these individual causes.