An activity variance is due solely to the difference between the level of activity assumed in the planning budget and the actual level of activity used in the flexible budget.

Question

Quizplus · Accepted Answer

An activity variance is a type of flexible budget variance that measures the difference between the actual level of activity and the budgeted level of activity. This variance exists because the budget was prepared based on a certain level of activity that may not have been achieved in reality. Therefore, the answer is true, and activity variances do indeed result from differences between the planned activity and the actual level of activity.

An Activity Variance Is Due Solely to the Difference Between