In a flexible budget performance report

a. the budget is based on the activity that was expected at the beginning of the period.
b. the budget is adjusted to the actual activity for the period.
c. budgeted fixed costs are different than they would be in a static budget.
d. only the unfavorable variances are recorded for managers to explore.

b. the budget is adjusted to the actual activity for the period.

Explanation:

A flexible budget performance report is a comparison between actual costs and revenues, and the budgeted income and expenses at the end of a period, based on actual performance.  The report shows the difference between the actual results and the estimated numbers.  Management uses the report to determine if the company's results were in line with management expectations.

The performance report is prepared at the end of a financial period.  It helps the management analyse any major variances between the actual performance at the estimated numbers at the beginning of a period.  The report helps the management identify the companies strong areas, and the sections that need improvements.

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