The Comfort Foam Products Company completed the flexible budget analysis for the second quarter,which is given below.

Which of the following would be a correct factor to explain the sales volume variance for variable costs?

Question

The Comfort Foam Products Company completed the flexible budget analysis for the second quarter,which is given below.

Which of the following would be a correct factor to explain the sales volume variance for variable costs?

Quizplus · Accepted Answer

The sales volume variance is caused by the difference between actual sales volume and budgeted sales volume. Therefore, an increase in sales volume would result in a favorable sales volume variance for variable costs, as more units would be sold and variable costs would be spread over a larger number of units. Option A and B would be factors for price variance and efficiency variance, respectively. Option D relates to fixed costs and has no impact on variable costs.

The Comfort Foam Products Company Completed the Flexible Budget Analysis