A revenue variance is unfavorable if the revenue in the static planning budget is less than the revenue in the flexible budget.

Question

Quizplus · Accepted Answer

A revenue variance is actually unfavorable if the revenue in the flexible budget is less than the revenue in the static planning budget. This is because the flexible budget takes into account the actual level of activity, while the static planning budget is based on a predicted level of activity. If the actual level of activity is lower than predicted, revenue will decrease and the variance will be unfavorable.

A Revenue Variance Is Unfavorable If the Revenue in the Static