Ch 9 PCP
estimates of what revenues and costs should have been based on the actual level of activity are shown on the
flexible budget
the difference between a revenue or cost item in the planning budget and the same item in the flexible budget at the actual level of activity is a _____ variance
activity
what is the difference between flexible budgeted revenue and planning revenue
activity variance
true or false: a static budget is being compared to actual activity. The variance is F for net income but U for most expenses. This suggests that actual activity was lower than budgeted
false. actual activity was higher than expected which results in higher net income and expenses
when comparing the static planning budget to actual activity, a problem that arises when actual activity is higher than budgeted activity is that _____
net income is higher than excepted but all or most expense variances are unfavorable
a cost centers performance report does not include _____
net operating income
a budget that is prepared at the beginning of the period for a specific level of activity is called a ____ budget
planning
revenue variance
the difference between how much revenue should have been given the actual level of activity and the actual revenue
companies use the ___ ____ cycle to evaluate and improve performance
variance analysis