In analyzing company operations, the controller of the Carson Corporation found a $250,000 favorable flexible budget revenue variance. The variance was calculated by comparing the actual results with the flexible budget. This variance can be wholly explained by: (CMA adapted)
A) the total flexible budget variance.
B) the total static budget variance.
C) changes in unit selling prices.
D) changes in the number of units sold.

Question

Quizplus · Accepted Answer

The favorable flexible budget revenue variance is explained by changes in unit selling prices, as the flexible budget adjusts for the actual number of units sold, isolating the impact of price changes.

In Analyzing Company Operations, the Controller of the Carson Corporation