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:

Cumulative Quantity Discounts

Price reductions based on the total quantity of goods a customer purchases over a given time period, incentivizing larger orders.

Quoting Prices

The act of providing a potential buyer with a specific price at which goods or services can be sold, often before a deal is finalized.

Transportation Costs

Expenses associated with the movement of goods or people from one location to another, including fuel, labor, and maintenance.

Skimming Pricing

A pricing strategy where a new product is priced high to take advantage of the willingness of customers to pay a premium for something new or different, then gradually lowering the price over time.