The budget restated at actual volume, so variable costs are compared like for like and a cost that fell only because sales fell is not reported as a saving.
A flexed budget recalculates the budget's variable lines at the volume actually achieved, keeping the budgeted rate per unit. Compared with it, a variance shows how well costs were controlled. Compared with the original budget, a variable-cost variance mostly shows that volume differed, which is already visible on the revenue line.
Flexed budget for a variable line = budgeted cost per unit × actual units. Fixed lines stay at the original budget. Spending variance = actual − flexed budget; volume variance = flexed budget − original budget.
Cost of sales was budgeted at 10,000 units × $20 = $200,000. Actual volume was 8,000 units and actual cost of sales $172,000. Against the original budget that looks $28,000 under. The flexed budget is 8,000 × $20 = $160,000, so cost of sales was actually $12,000 over, an unfavorable spending variance.
Flexing semi-fixed costs as if fully variable. Choosing the volume driver after the fact to make the variance look better. The full guide is the budget vs actual template.