Flexible-budget variances are a better measure of operating performance than static-budget variances because they compare actual revenues to budgeted revenues and actual costs to budgeted costs for the same units of output.

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Flexible-budget variances adjust for changes in activity levels and provide a more accurate picture of operating performance as they compare actual revenues and costs to what was budgeted for the same level of output. Static-budget variances only compare actual results to the original budget, without considering any changes in activity levels, making them less meaningful for evaluating operating performance.

Flexible-Budget Variances Are a Better Measure of Operating Performance Than