The Carolina Rubber Products Company completed the flexible budget analysis for the second quarter,which is given below. Which of the following would be a correct analysis of the sales volume variance for sales revenue?
A) increase in sales price per unit
B) increase in sales volume
C) increase in variable cost per unit
D) increase in fixed costs

Question

The Carolina Rubber Products Company completed the flexible budget analysis for the second quarter,which is given below.  Which of the following would be a correct analysis of the sales volume variance for sales revenue?
A) increase in sales price per unit 
B) increase in sales volume 
C) increase in variable cost per unit 
D) increase in fixed costs

Quizplus · Accepted Answer

The sales volume variance measures the difference between the actual number of units sold and the budgeted number of units sold, multiplied by the budgeted selling price per unit. An increase in sales volume would result in a favorable sales volume variance, indicating that the company sold more than it had planned. The other options listed would affect other variances, such as the sales price variance, variable cost variance or fixed cost variance.

The Carolina Rubber Products Company Completed the Flexible Budget Analysis