The effect on sales, expenses, or operating income of changes in units sold is measured by the:
A) Flexible-budget variance.
B) Sales-volume variance.
C) Sales price variance.
D) Operating income flexible-budget variance.
E) Production-volume variance.

Question

Quizplus · Accepted Answer

The sales-volume variance measures the effect on sales, expenses, or operating income of changes in units sold. The flexible-budget variance measures the effect of changes in actual results compared to the flexible budget, the sales price variance measures the effect of changes in the selling price, the operating income flexible-budget variance measures the difference between actual and flexible-budget operating income, and the production-volume variance measures the effect of changes in production volume on costs.

The Effect on Sales, Expenses, or Operating Income of Changes