Business

Oliver Boone

7 August, 19:24

The Crockery Pottery Company completed the flexible budget analysis for the second quarter, which is given below.

Actual Flexible Budget Flexible Sales Volume Static

Results Variance Budget Variance Budget

Units 12,840 0 12,840 940 F 11,900

Sales Revenue $62,770 $ 2,023U $ 64,793 $ 4,743F $ 60,050

Variable Costs 27,560 315 U 27,245 $ 1,995 U 25,250

Contribution

Margin $ 35,210 $ 2,338 U $ 37,548 $ 2,748 F $ 34,800

Fixed Costs 34,210 170 U 34,040 $ 0 34,040

Operating Income

/ (Loss) $ 1,000 $ 2,508 U $ 3,508 $ 2,748 F $ 760

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

A. increase in sales volume

B. increase in variable cost per unit

C. increase in sales price per unit

D. increase in fixed costs