The Washington Fish Company completed the flexible budget analysis for the second quarter,which is given below. Which of the following statements would be a correct analysis of the sales volume variance for operating income?

Question

The Washington Fish Company completed the flexible budget analysis for the second quarter,which is given below.  Which of the following statements would be a correct analysis of the sales volume variance for operating income?

Quizplus · Accepted Answer

The sales volume variance shows the impact of changes in sales volume on operating income. In this case, the flexible budget analysis shows that the actual sales volume exceeded the expected sales volume, resulting in an increase in operating income. Therefore, an increase in sales volume (Option C) would be the correct analysis of the sales volume variance for operating income. A decrease in sales price per unit (Option A) would result in a favorable price variance but would not necessarily impact the sales volume variance. An increase in variable cost per unit (Option B) would result in an unfavorable cost variance but would not necessarily impact the sales volume variance. An increase in fixed costs (Option D) would impact the fixed cost variance but would not necessarily impact the sales volume variance.

The Washington Fish Company Completed the Flexible Budget Analysis for the Second