An Unfavorable Flexible Budget Variance in Operating Income Might Be

question 63

Multiple Choice

An unfavorable flexible budget variance in operating income might be due to a(n) ________.

• A) increase in sales price per unit
• B) decrease in sales volume
• C) increase in variable cost per unit
• D) decrease in fixed costs

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Definitions:

Administrative Expense Budget

A projection of the costs associated with the general administration and management of a business.

Variable Cost

Costs that change in proportion to the level of production activity or business operations.

Monthly Fixed Cost

Regular, consistent costs that do not vary with production volume or business activity level, calculated on a monthly basis.

Budgeted Sales

The projected amount of sales revenue that a company plans to achieve in a specific period, based on market analysis and company goals.