An activity variance is the difference between a revenue or cost item in the flexible budget and the same item in the static planning budget. An activity variance is due solely to the difference in the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget.
Herein, what is an activity variance?
Question: An Activity Variance Is The Difference Between An Actual Revenue Or Cost And The Revenue Or Cost In The Flexible Budget That Is Adjusted For The Actual Level Of Activity Of The Period.
Also Know, what does variance in accounting mean? In budgeting (or management accounting in general), a variance is the difference between a budgeted, planned, or standard cost and the actual amount incurred/sold. Variances can be computed for both costs and revenues.
In this way, what is a revenue variance and what does it mean?
Revenue variances are used to measure the difference between expected and actual sales. This is the difference between the actual and expected number of units sold, multiplied by the budgeted price per unit.
What is variance in business?
A variance has several meanings in business. In an accounting sense, a variance is the difference between an actual amount and a pre-determined standard amount or the amount budgeted. In a statistical sense, a variance is a measure of the amount of spread in a distribution.