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Timothy's wife is having trouble conceiving a child despite reports on her reproductive fitness being normal. However, on examining Timothy, the doctor determines that his testes are undeveloped, and that he has enlarged breasts. He also observes that Timothy is unusually tall, although his parents and grandparents are of short stature. The doctor informs Timothy that these symptoms are due to Timothy having an extra X chromosome, making him XXY instead of XY. Timothy most likely suffers from
Variable Costs
Costs that change in proportion to the level of activity or volume of production in a business, such as materials and labor.
Activity Variance
The difference between a revenue or cost item in the flexible budget and the same item in the static planning budget. An activity variance is due solely to the difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget.
Flexible Budget
A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.
Static Planning Budget
is a budget based on a fixed level of activity and does not change with actual activity levels, useful for planning but less so for performance evaluation.
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