The Carolina Products Company Has Just Completed a Flexible Budget

question 97

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 operating income?

• 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:

Scarcity

The fundamental economic problem of having limited resources to meet infinite wants, requiring choices and priorities in resource allocation.

Unlimited Wants

The economic concept that humans have endless desires or wishes for goods and services, exceeding the finite resources available.

Limited Means

A situation or condition of having restricted financial resources or capabilities.

Capital Equipment

Long-lasting tools, machinery, or infrastructure used in the production of goods and services.