The sales activity variance for ________ will always be zero.
A) sales
B) contribution margin
C) variable costs
D) fixed costs

Question

Quizplus · Accepted Answer

The sales activity variance measures the impact of changes in sales volume on the overall variance of the profit. This variance is caused by the difference between the actual sales quantity and the budgeted sales quantity, multiplied by the standard contribution margin per unit. The contribution margin is calculated as sales revenue minus variable costs. Since fixed costs do not change with changes in sales volume, they do not affect the sales activity variance. Therefore, the sales activity variance for fixed costs will always be zero.

The Sales Activity Variance for ________ Will Always Be Zero