ECONOMICS

Detailed explanation-1: -A flexible budget variance is any difference between the results generated by a flexible budget model and actual results. If actual revenues are inserted into a flexible budget model, this means that any variance will arise between budgeted and actual expenses, not revenues.

Detailed explanation-2: -The spending or flexible budget variance is the difference between the actual and flexible budget amount. This variance is favorable when the flexible budget amount is less than the actual cost. The volume or activity variance is the difference between the flexible and static planning budget.

Detailed explanation-3: -A flexible budget variance is the difference of amounts between the results of a flexible budget and the actual numbers. A flexible budget, also known as a variance budget, is a financial plan that adjusts according to a company’s revenue, expenses, or production levels.

Detailed explanation-4: -To calculate a flexible budget, first multiply the variable cost by the actual units produced. For example, if you produced 100 units at a unit cost of $5, the budget might be $5, 000. A flexible budget accounts for a larger number of units produced, so you might expect to sell up to 150 units.