The Carolina Products Company Has Just Completed a Flexible Budget

question 62

Multiple Choice

The Carolina Products Company has just completed a flexible budget analysis of 2^nd quarter operating income, as shown here:

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Based on the above data, which of the following statements would be a correct interpretation of the sales volume variance for variable expenses?

• A) Decrease in price per unit
• B) Increase in variable cost per unit
• C) Increase in sales volume
• D) Increase in fixed costs

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Definitions:

Smoothing Constant

A parameter used in exponential smoothing methods for time series data to control the degree of smoothing applied to the data.

Forecast

A prediction or estimate of future events or trends, often based on current data and analysis.

Number of Forecast Values

The quantity of data points projected or predicted for future periods based on historical trends and analysis.

Smoothing Constant

A parameter used in exponential smoothing methods to apply different weights to past observations, typically ranging between 0 and 1.