The Total Operating-Income Variance for Any Period

question 81

Multiple Choice

The total operating-income variance for any period:

• A) Is unaffected by variances between actual and budgeted sales volume.
• B) Can be decomposed into a total flexible-budget variance and a sales-volume variance.
• C) Can be decomposed into a total flexible-budget variance and a sales price variance.
• D) Is equal to the sum of selling and administrative expense variances plus the total sales-volume variance for the period.
• E) Equals the sum of the total flexible-budget variance plus the sales-mix variance for the period.

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Definitions:

Market Penetration

A quantification of the volume of sales or adoption rate of a product or service as compared to the entire theoretical customer base for that item.

Market Penetration

A strategy aimed at increasing a company's market share for an existing product, or promoting a new product, within an existing market.

Product Development

The process of bringing a new product to market, including idea generation, design, development, and marketing.

Market Development

A growth strategy involving the promotion of existing products into new markets or to new segments, aiming to increase sales and customer base.