Dambrodt Travel Agency's Actual Operating Income for the Current Year

question 117

Multiple Choice

Dambrodt Travel Agency's actual operating income for the current year is $25,000.The flexible budget's operating income for actual volume achieved is $32,000,while the static budget's operating income is $35,000.What is the sales volume variance for operating income?

• A)$7,000 unfavorable
• B)$3,000 favorable
• C)$3,000 unfavorable
• D)$7,000 favorable

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Definitions:

Excess Supply

A market situation where the quantity of a good or service supplied is greater than the quantity demanded at the current price.

Deflation

Deflation is a decrease in the general price level of goods and services in an economy over a period, indicating negative inflation.

Money Demand Curve

A graphical representation illustrating the relationship between the quantity of money demanded and the interest rate, showing how they vary inversely.

Inflation Rate

The annual rate at which the cost of goods and services rises within an economy, reflecting a growth in price levels over time.