The activity variance for revenue is unfavorable if the revenue in the flexible budget is less than the revenue in the static planning budget.

Question

Quizplus · Accepted Answer

The activity variance for revenue is calculated as the difference between the revenue in the flexible budget and the revenue in the static planning budget. If the revenue in the flexible budget is less than the revenue in the static planning budget, it means that the business did not generate as much revenue as it had planned for. This is considered unfavorable as it indicates a shortfall in revenue. Therefore, the statement is true.

The Activity Variance for Revenue Is Unfavorable If the Revenue