Question

an internal report that helps management compare actual performance and budgeted performance based on actual activity level is called a(n): multiple choice sales budget performance report. flexible budget performance report. master budget performance report. static budget performance report. operating budget performance report.

Explanation:

To solve this, we analyze each option:

• Sales budget performance report: Focuses on sales, not general performance vs budget at actual activity. Eliminate.
• Flexible budget performance report: Adjusts the budget to the actual activity level and then compares actual performance to this adjusted (flexible) budget. This matches the description.
• Master budget performance report: Compares to the master budget (which is static in activity level assumption), not based on actual activity. Eliminate.
• Static budget performance report: Uses a budget based on a fixed activity level, not actual activity. Eliminate.
• Operating budget performance report: Focuses on operating budgets, not the key of adjusting to actual activity for comparison. Eliminate.

Answer:

B. Flexible budget performance report.