The Carolina Products Company has just completed a flexible budget analysis of 2^nd quarter operating income, as shown here: Based on the above data, which of the following statements would be a correct interpretation of the sales volume variance for sales revenues?

Question

Quizplus · Accepted Answer

The sales volume variance is the difference between the flexible budget and the static budget, and is solely caused by changes in sales volume. Therefore, an increase in sales volume would cause a favorable sales volume variance, while any of the other options listed would affect other variances.

The Carolina Products Company Has Just Completed a Flexible Budget