The Kentucky Foam 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 variable costs?

Question

The Kentucky Foam 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 variable costs?

Quizplus · Accepted Answer

Sales volume variance for variable costs is caused by a change in sales volume. When sales volume increases, variable costs per unit remain constant, but the total variable costs increase in proportion to the increase in sales volume. Therefore, option C is the correct choice. The other options, such as decrease in sales price per unit (A), increase in variable cost per unit (B), or increase in fixed costs (D), would not directly affect the sales volume variance for variable costs.

The Kentucky Foam Products Company Completed the Flexible Budget Analysis