The following data are for Pepperdine Corporation: The sales activity variance for operating income is ________.
A)$14,000 Favorable
B)$14,000 Unfavorable
C)$16,000 Favorable
D)$16,000 Unfavorable

Question

The following data are for Pepperdine Corporation:  The sales activity variance for operating income is ________.
A)$14,000 Favorable 
B)$14,000 Unfavorable 
C)$16,000 Favorable 
D)$16,000 Unfavorable

Quizplus · Accepted Answer

Without knowing the actual sales or budgeted sales, we cannot calculate the sales activity variance for operating income. Therefore, we cannot choose option A or B. However, if we assume that the actual sales are higher than the budgeted sales, we would have a favorable variance. Given that option C is the only one with a favorable variance, C is the best choice.

The Following Data Are for Pepperdine Corporation: the Sales