In analyzing company operations,the controller of the Jason 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.Since the flexible budget is based on actual output,the variation could only come from the selling price.

Question

Quizplus · Accepted Answer

The controller found a favorable flexible budget revenue variance, meaning actual revenues exceeded expected revenues based on the flexible budget. Since the flexible budget is calculated using the actual output and variable costs per unit, the only explanation for the variance would be changes in unit selling prices. Therefore, choice C - changes in unit selling prices - is the only valid explanation for the favorable flexible budget revenue variance.

In Analyzing Company Operations,the Controller of the Jason Corporation Found