The Alaska Fish Company completed the flexible budget analysis for the second quarter,which is given below. Which of the following statements would be a correct factor to explain the sales volume variance for operating income?

Question

The Alaska Fish Company completed the flexible budget analysis for the second quarter,which is given below.  Which of the following statements would be a correct factor to explain the sales volume variance for operating income?

Quizplus · Accepted Answer

The sales volume variance for operating income is caused by the change in sales volume. As per the flexible budget analysis, the actual sales volume was higher than the budgeted sales volume, which resulted in a favorable operating income. Therefore, an increase in sales volume would be the correct factor to explain the sales volume variance for operating income. The other options, such as decrease in sales price per unit, increase in variable cost per unit, and increase in fixed costs would affect the overall profitability but would not directly impact the sales volume variance for operating income.

The Alaska Fish Company Completed the Flexible Budget Analysis for the Second