Question

The flexible-budget variance measures what the costs and revenues should have been for the budgeted number of outputs. the difference between budgeted expenditures and actual expenditures for the budgeted number of outputs. the difference between budgeted and actual variable costs. the difference between expected expenditures for the actual number of outputs and the actual expenditures for the actual number of outputs. what the costs and revenues should have been for the static budgeted number of outputs.

Answer 1

The flexible-budget variance measures

the difference between expected expenditures for the actual number of outputs and the actual expenditures for the actual number of outputs.

Step-by-step explanation:

The flexible budget is prepared to show the variance between expected revenue and expenses that could be attained, based on the actual activity level and the revenue and expenses of actual results. When the flexible budget variance is compared with the static planning budget, it shows the activity (volume) variance. An activity variance arises from the difference in the actual level of activity used in the flexible budget and the level of activity used in the static planning budget. When the flexible budget is compared with the actual budget, it shows the revenue and spending variance based on actual activity levels.