Which variance is measured by comparing flexible revenues to static budgeted revenues?

The variance measured by comparing flexible revenues to static budgeted revenues is known as the revenue variance. This variance specifically analyzes the difference between what the revenue was expected to be according to the static budget and what it actually turned out to be once adjustments have been made for changes in volume.

In practice, a static budget is created at the beginning of a period based on expected activity levels, and it does not change regardless of actual volume. In contrast, a flexible budget adjusts budgetary figures based on the actual revenue-generating activity throughout the period. By comparing the flexible revenue (which reflects actual performance) to the static budgeted revenue, you can determine how much variation in revenue was due to changes in volume rather than price or other factors.

This insight allows managers to better understand the revenue performance of their operations by focusing on how well the organization adapted its revenue projections to actual performance. Understanding this variance is crucial for effective management of operations and financial forecasting.