The Difference Between the Total Actual Sales Revenue of a Period

question 18

Multiple Choice

The difference between the total actual sales revenue of a period and the total flexible-budget sales revenue for the units sold during the period is the:

• A) Total flexible-budget variance.
• B) Sales volume variance.
• C) Selling price variance.
• D) Operating income flexible-budget variance.
• E) Operating income variance.

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Definitions:

Income Effect

Changes in economic or personal income and the resulting impact on how much of a product or service is sought after.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute away from more expensive goods toward cheaper ones.

Total Utility

The total satisfaction or benefit received by consuming a certain quantity of goods or services.

Utils

A hypothetical unit of measure used to quantify the satisfaction or utility that a consumer derives from consuming a good or service.