1. A flexible budget performance report with more than one cost driver can contain activity variances but not revenue or spending variances due to the increased complexity.

2. 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.

3. A revenue variance is favorable if the actual revenue is greater than the revenue in the static planning budget.

4. An unfavorable activity variance for revenue indicates that activity was less than expected when the static planning budget was developed.

5. 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.

6. A spending variance is the difference between the amount of the cost in the static planning budget and the amount of the cost in the flexible budget.

7. A flexible budget report should exclude variable costs because they can be expected to change with a change in the level of activity.

8. Fixed costs should not be ignored when evaluating how well a manager has controlled costs.

9. Comparing a static planning budget to actual costs is not a good way to assess whether variable costs are under control.

10. A favorable spending variance occurs when the actual cost is less than the amount of the cost in the static planning budget.