The Dear Dairy Cheese Company completed the flexible budget analysis for the second quarter,which is given below. Which of the following statements would be a correct factor to explain the flexible budget variance for fixed costs?

Question

The Dear Dairy Cheese Company completed the flexible budget analysis for the second quarter,which is given below.  Which of the following statements would be a correct factor to explain the flexible budget variance for fixed costs?

Quizplus · Accepted Answer

The flexible budget variance for fixed costs can be explained by an increase in fixed costs, which would cause the actual costs to be higher than the budgeted costs. None of the other factors listed (decrease in sales price per unit, increase in variable cost per unit, or increase in sales volume) would directly impact fixed costs.

The Dear Dairy Cheese Company Completed the Flexible Budget Analysis