The Carolina Products Company has completed the flexible budget analysis for the 2 nd quarter, which is as given below.
Use the table above to answer the following questions:
-Which of the following would be a correct interpretation of the sales volume variance for sales revenues?

Question

The Carolina Products Company has completed the flexible budget analysis for the 2 nd quarter, which is as given below. 
Use the table above to answer the following questions:
-Which of the following would be a correct interpretation of the sales volume variance for sales revenues?

Quizplus · Accepted Answer

The sales volume variance is calculated by comparing the flexible budget amount for sales revenue with the actual sales revenue. In this case, the flexible budget amount for sales revenue was $506,250 and the actual sales revenue was $540,000, resulting in a favorable variance of $33,750. This means that the company sold more units than it had anticipated in the flexible budget, resulting in higher sales revenue. Therefore, the best choice is B - increase in sales volume.

The Carolina Products Company Has Completed the Flexible Budget Analysis