A flexible budget variance is $1,500 favorable for unit-related costs. This indicates that: A. actual costs were $1,500 more than the master budget. B. actual costs were $1,500 less than standard for the achieved level of activity. C. the sum of the planning and efficiency variances totals $1,500. D. actual costs were $1,500 less than for the planned level of activity.

When a company has a flexible budget variance is $1,500 favorable for unit-related costs, it gives an indication that actual costs were $1,500 less than for the planned level of activity. Therefore, the option D holds true.

What is flexible budget variance?

The estimated amount that a company plans to keep aside as a part of its estimated unit-related costs that it forecasts to incur throughout the year of its operations is known as a flexible budget variance. A positive flexible budget variance refers to less incurring of actual unit-related costs.

In the above condition, when the company had a flexible budget variance with a positive balance of $1,500 at the end of the year, it is clearly an indication of actual costs incurred by the company throughout the year were less than $1,500 of its total estimates.

Hence, the option D holds true regarding the flexible budget variance.

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