A performance report using activity flexible budgeting compares
A)budgeted costs for actual activity usage levels with the actual activity costs.
B)actual activity costs with budgeted overhead costs.
C)actual overhead costs with the budgeted activity costs for actual activity usage levels.
D)the static activity budget costs with the budgeted activity costs for the actual activity usage levels.
E)none of these.

Question

Quizplus · Accepted Answer

Activity flexible budgeting adjusts the budgeted costs based on the actual activity usage levels. This means that the flexible budgeted costs will be more accurate than the static budgeted costs. By comparing the budgeted costs for the actual activity usage levels with the actual activity costs, a performance report can help managers identify areas where they exceeded or fell short of the budgeted amounts, and take corrective actions if necessary. Option A is the only choice that describes this comparison.

A Performance Report Using Activity Flexible Budgeting Compares