Question

Which variance analysis method requires a company to identify the actual variable and fixed costs as well as budgeted rates and costs?

Answer 1

The variance analysis method that requires a company to identify the actual variable and fixed costs, as well as budgeted rates and costs, is the standard costing method.

Step-by-step explanation:

The variance analysis method that requires a company to identify the actual variable and fixed costs, as well as budgeted rates and costs, is the standard costing method.

This method involves comparing the actual costs incurred by a company with the budgeted or standard costs for a given period. It helps in identifying the variances between the actual and budgeted costs.

By calculating these variances, companies can analyze the reasons behind the differences and take corrective actions to improve their cost management and performance.