A flexible budget provides estimates of what revenues and costs should be. If we are trying to compare actual costs to budgeted costs, why is comparing actual costs to the flexible budget better than comparing them to the static/planning budget?

2)Explain why a business could have a favorable material price variance but an unfavorable material quantity variance. Dont just explain the math. Provide a real world scenario.

3Simply looking at overall spending variances tells us whats different. Why is it important for a business to go deeper and examine specific variances like material quantity and prices variances or labor rate and efficiency variances?