With an activity flexible budget, a budget variance is calculated
A)based on a flexible budget based on cost for actual units produced.
B)based on a flexible budget based on various activity drivers for actual units produced.
C)based on a flexible budget based on flexible manufacturing.
D)based on a flexible budget based on committed resources for actual units produced.

Question

Quizplus · Accepted Answer

An activity flexible budget is based on various activity drivers (such as production volume, direct labor hours, or machine hours) and adjusts for changes in activity levels. Therefore, a budget variance based on this type of budget would be based on the flexible budget using these activity drivers for the actual units produced.

With an Activity Flexible Budget, a Budget Variance Is Calculated