Ch 9 T/F

In a flexible budget, when the activity declines, the total variable cost also declines.

True

A spending variance is the difference between the amount of the cost in the static planning budget and the amount of the cost in the flexible budget.

false

A favorable revenue variance could be due to selling more units than expected

F, activity

A flexible budget performance report contains activity variances but not revenue or spending variances.

false

Actual costs are determined by plugging the actual level of activity for the period into the cost formulas used in flexible budgets.

False

Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes.

False

The activity variance for a fixed cost should be zero

True

The main difference between a flexible budget and a static budget is that the static budget is not adjusted for changes in the level of activity.

True

A revenue variance is the difference between what the total sales revenue should be, given the actual level of activity of the period, and the actual total sales revenue

true