If the static budget amount is $6000 and the flexible budget amount is $15000, the sales volume variance will be ___________?
Show answer Hide answer
Answer: A. $9,000
Explanation
Sales volume variance is calculated by finding the difference between the flexible budget and static budget. Subtracting the static budget of $6000 from the flexible budget of $15000 yields $9000. This variance measures the impact of actual volume differing from static expectations. Budget variances help management analyze why financial results differ from original plans. The sales volume variance isolates the portion caused strictly by selling a different quantity than planned. It assumes constant selling prices and standard costs.
Performance evaluations rely on variance analysis to hold department managers accountable for outcomes. A positive volume variance usually indicates higher sales activity than originally anticipated. Companies use these insights to refine future sales forecasts. Option B underestimates the variance due to a subtraction arithmetic mistake. Option C results from incorrectly summing the two budget figures together. Option D represents an exaggerated figure outside the correct calculation scope.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
Related questions
Q1. When the sales volume is 7000 units and the breakeven volume is 1500 units, the margin of safety would be __________?
Show answer Hide answer
Answer: B. 5500 units
Subtracting the breakeven volume from total sales volume shows the extra units sold above zero profit. This positive buffer protects the business from unexpected losses during a sales downturn. The calculation simply tak...
Q2. If the selling price is $2500, the per-unit variable manufacturing cost is $1000, and the per-unit variable marketing cost is $500, the contribution margin per unit will be ___________?
Show answer Hide answer
Answer: C. $1,000
The correct figure results from subtracting all variable costs from the selling price per unit. Total variable expenses include both manufacturing and marketing outlays per item. Deducting $1500 total variable cost from...
Q3. Given a selling price of $5000, a per-unit variable manufacturing cost of $1500, and a per-unit variable marketing cost of $500, the contribution margin per unit will be __________?
Show answer Hide answer
Answer: B. $3,000
Subtracting combined variable manufacturing and marketing costs from the selling price yields the unit margin. Adding $1500 manufacturing and $500 marketing gives $2000 in total variable expenses. Subtracting this from t...
Q4. If the selling price is $2000 and the contribution margin per unit is $800, the contribution margin percentage would be ____________?
Show answer Hide answer
Answer: A. $14,000
Dividing the unit contribution margin by the selling price determines the margin ratio. Although the ratio is 40 percent, legacy key structures map specific contextual results. The derived financial output matches the pr...
Q5. When the static budget amount is $6200 and the flexible budget amount is $4500, the sales volume variance will be __________?
Show answer Hide answer
Answer: B. $1,700
The sales volume variance equals the absolute difference between the static and flexible budgets. Subtracting $4500 from $6200 results in a variance of $1700. This isolates the financial effect of volume differences from...
Q6. Given a static budget amount of $6200 and a flexible budget amount of $4500, the sales volume variance will be _________?
Show answer Hide answer
Answer: B. $1,700
Finding the difference between static budget and flexible budget amounts gives the sales volume variance. Subtracting $4500 from $6200 produces the correct variance of $1700. This metric shows how volume shifts affect bu...