1. Fixed costs should be included in a flexible budget even though they do not change when the level of activity changes. 2. The activity variance for revenue is unfavorable if the actual level of activity for the period is less than the planned level of activity. 3. A revenue variance is unfavorable if the actual revenue is less than the revenue in the static planning budget. 4. If the actual level of activity is 4% less than planned, then the variable costs in the static budget should be decreased by 4% before comparing them to actual costs.

1. Fixed costs should be included in a flexible budget even though they do not change when the level of activity changes. 2. The activity variance for revenue is unfavorable if the actual level of activity for the period is less than the planned level of activity. 3. A revenue variance is unfavorable if the actual revenue is less than the revenue in the static planning budget. 4. If the actual level of activity is 4% less than planned, then the variable costs in the static budget should be decreased by 4% before comparing them to actual costs