The Body Balance Fitness Company Completed the Flexible Budget Analysis

question 52

Multiple Choice

The Body Balance Fitness Company completed the flexible budget analysis for the second quarter,which is given below. $\begin{array}{|l|c|c|c|c|c|c|c|}\hline & \begin{array}{l}\text { Actual } \\\text { Results }\end{array} & \begin{array}{c}\text { Flexible } \\\text { Budget } \\\text { Variance } \\\end{array} && \begin{array}{l}\text { Flexible } \\\text { Budget }\end{array} & \begin{array}{c}\text { Sales } \\\text { Volume } \\\text { Variance }\end{array} && \begin{array}{c}\text { Static } \\\text { Budget }\end{array} \\\hline \text { Units } & \underline{12,800}_{} & \underline{0} && \underline{12,800} & \underline{1000}& \underline{{F}} & \underline{11,800} \\\hline \text { Sales Revenue } & \$ 62,770 & \$2391&U& \$ 65,161 & \$ 5091 &{F} & \$ 60,070 \\\hline \text { Variable Costs } & \underline{27,540}_{} & \underline{150} &\underline{U} & \underline{27,390} & \underline{\$ 2140} &\underline{U} & \underline{25,250}\\\hline \text { Contribution Margin } & \$ 35,230 & \$ 2541 &{U} & \$ 37,771 & \$ 2951 &{F} & \$ 34,820 \\\hline \text { Fixed Costs } & \underline{34,280} & \underline{270 }&\underline{U} & \underline{34,010 }& \underline{\$ 0}& & \underline{34,010}_{} \\\hline \text { Operating Income/(loss) } & \underline{\$ 950} &\underline{ \$ 2811 }&\underline{U} &\underline{ \$ 3761} & \underline{\$ 2951 }&\underline{F} & \underline{\$810}\\\hline\end{array}$ Which of the following statements would be a correct factor to explain the flexible budget variance for variable costs?

• A)decrease in sales 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:

Centralised Communication Network

Communication flows only between individual members and a hub or centre point.

Simple Tasks

Tasks that are straightforward and uncomplicated to complete, often requiring minimal effort or skill.

Norming Stage

The norming stage is a phase in team development where members resolve conflicts, increase cohesion, and establish clear norms and roles.