True Or False

1- Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes. ( )

2-To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity. ( )

3-The activity variance for revenue is favorable if the actual revenue for the period exceeds 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-When the activity measure is the number of units sold, the revenue variance is favorable if the average actual selling price is greater than expected. ( )

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-A flexible budget performance report contains activity variances but not revenue or spending variances. ( )

9-If the actual level of activity differs from what was planned, it would be misleading to compare actual costs to the static, unchanged planning budget. ( )

10-If the actual level of activity is 4% less than planned, then the fixed costs in the static budget should be decreased by 4% before comparing them to actual costs. ( )