An Unfavorable Sales Volume Variance in Operating Income Suggests A(n)

question 98

Multiple Choice

An unfavorable sales volume variance in operating income suggests a(n) :

• A)increase in number of actual units sold.
• B)decrease in number of actual units sold when compared to the expected number of units sold.
• C)increase in variable expenses per unit.
• D)decrease in fixed costs.

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Definitions:

Marginal Cost Increases

The rise in the cost to produce one additional unit of a good or service.

Marginal Product

The additional output that is produced as a result of adding one more unit of a specific input, holding all other inputs constant.

Total Cost

The overall expense incurred in the production of goods or services, combining both fixed and variable costs.

Average Total Cost

The total cost of production divided by the total output, indicating the average cost per unit of output.