The two major components of the total profit variance are:
A)Sales volume variance and flexible budget variance.
B)Price variance and quantity variance.
C)Sales volume variance and sales mix variance.
D)Flexible budget variance and quantity variance.
E)None of the above.

Question

Quizplus · Accepted Answer

The total profit variance is primarily composed of the sales volume variance, which measures the impact of the difference in the actual quantity sold from the expected quantity, and the flexible budget variance, which assesses the difference between the actual results and the budgeted amounts based on the actual sales volume.

The Two Major Components of the Total Profit Variance Are