When a flexible budget is used in performance evaluation,actual costs are compared to what the costs should have been for the actual level of activity during the period rather than to the static planning budget.

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This statement is true. When using a flexible budget for performance evaluation, actual costs are compared to what the costs should have been for the actual level of activity, rather than the static planning budget. This takes into account the actual level of activity and adjusts the budget accordingly for a more accurate comparison.

When a Flexible Budget Is Used in Performance Evaluation,actual Costs