Activity Volume Variance Meaning

Accounting glossary · Understand, connect, apply

An activity volume variance isolates the effect of a difference between planned and actual activity levels in a budget comparison.

Example

At variable cost of 3 per unit, activity rising from 1,000 to 1,200 units raises the flexible cost budget by 600.

Remember the difference

Separate the effect of activity volume from spending or efficiency differences. Terminology and favourable or unfavourable labels depend on the budgeting model.

Browse the accounting glossary → · Follow a learning path

Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.

Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.

← Return to the accounting glossary