Question: Discuss why the amount actually spent on direct labor could differ from that was budgeted in the planning budget? What assumption is implicitly made about

Discuss why the amount actually spent on direct labor could differ from that was budgeted in the planning budget?

What assumption is implicitly made about cost behavior when all of the items in a budget are adjusted in proportion to a change in activity?

Explain in detail why the spending variance takes the difference between the Flexible budget and Actual results instead of Planning budget and Actual results.

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