The difference between the flexible-budget operating income and the actual operating income in a period is the:
A) Sales mix variance.
B) Sales volume variance.
C) Sales price variance.
D) Operating income flexible-budget variance.
E) Total operating income variance.

Question

Quizplus · Accepted Answer

The difference between the flexible-budget operating income and the actual operating income in a period is known as the Operating income flexible-budget variance. This variance is the result of differences between actual and budgeted quantities of inputs and their actual prices. It allows managers to determine whether the variance was due to changes in price, quantity, or both. Therefore, Option D is the correct answer.

The Difference Between the Flexible-Budget Operating Income and the Actual