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 refers to the difference between the budgeted and actual sales volume. An increase in sales volume will result in higher revenues and potentially higher profits, all else being equal. Therefore, an increase in sales volume would result in a favorable sales volume variance for operating income. Decrease in sales price per unit (A) would affect the revenue variance, increase in variable cost per unit (B) would affect the variable cost variance, and increase in fixed costs (D) would affect the fixed cost variance.

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