Question

Spending variances are generated when

a.budgeted costs for the planning level of activity are compared with budgeted costs for the flexible level of activity.
b.budgeted costs for planning level of activity are compared with actual costs for the same level.
c.budgeted costs for actual level of activity are compared with actual costs for the same level.
d.actual costs for actual level of activity are compared with actual costs for the planning level of activity.

Answer 1

Spending variances occur when budgeted costs for the actual level of activity are compared with actual costs for that same level, which helps in financial management assessment.

Step-by-step explanation:

Spending variances are generated when budgeted costs for the actual level of activity are compared with actual costs for the same level of activity. This comparison is crucial to understand how well a company or a government is managing its finances in association with the level of economic activity or demand for products and services. When companies prepare their budgets, they often do so at different levels of projected activity and spending variances help in identifying the difference between what was expected to be spent (budgeted) and what was actually spent.

Answer 2

b.budgeted costs for planning level of activity are compared with actual costs for the same level.

Step-by-step explanation:

spending variance is the difference between the actual and expected (or budgeted) amount of an expense.