Asked by Christin Sajan on May 05, 2024
Verified
A flexible budget performance report with more than one cost driver will always have more unfavorable revenue and spending variances than a performance report with only one cost driver.
Revenue Variances
The difference between actual revenue and budgeted or expected revenue, analyzed to understand and manage financial performance.
Spending Variances
Spending variances are the differences between the actual amount spent and the budgeted or planned amount, often analyzed to control and manage expenses better.
- Identify and analyze activity and spending variances in performance reports.
Verified Answer
EM
Esmeralda MartinezMay 12, 2024
Final Answer :
False
Explanation :
A flexible budget performance report's variances, whether favorable or unfavorable, depend on actual performance compared to budgeted amounts, not on the number of cost drivers. Multiple cost drivers can lead to a more accurate allocation of costs, potentially reducing unfavorable variances.
Learning Objectives
- Identify and analyze activity and spending variances in performance reports.
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