Static-budget variance

Static-budget variance: the difference between an actual result and the original, unflexed static budget, before any adjustment for the volume actually achieved.

ByHoang TruongUpdated July 11, 2026

See it move

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A static budget of 5,000 units at €12 contribution gives €60,000. Extra volume, 300 more units sold, adds a favourable €3,600 sales-volume variance, taking the flexible budget to €63,600. A weaker contribution per unit then produces an adverse €5,300 flexible-budget variance, landing on the actual €58,300.

Where it fits

SubjectManagerial AccountingCoreTopicBudgeting & the Master BudgetCoreTopicStandard Costing & Variance AnalysisCore

The formula

LaTeX

V = A - B

Variables

$V$: Static-budget variance (€)
$A$: Actual result (€)
$B$: Static budgeted result (€)

The direct, un-flexed comparison between what happened and the original budget.

LaTeX

V = F + S

Variables

$V$: Static-budget variance (€)
$F$: Flexible-budget variance (€)
$S$: Sales-volume variance (€)

Splits the static-budget variance into the effect of operating differently at the actual volume (flexible-budget variance) and the effect of the volume itself differing from budget (sales-volume variance).

Check yourself

PracticeCORE

A company's static budget assumes 2,000 units sold at a contribution margin of €15 per unit, for a static budgeted contribution of €30,000. Actual results are 2,300 units sold with actual total contribution of €33,350. What is the static-budget variance, and is it favourable or unfavourable?

Select an answer to check your understanding.