What may cause a sales volume variance for fixed expenses?
A)Insurance costs on the factory rise unexpectedly during the year due to a crisis in the insurance industry.
B)The union calls for a strike of factory workers and temporary workers are hired to fill in for the striking employees.
C)The lease on the manufacturing facility is renegotiated and the lease payments increase during the year.
D)The number of units actually sold falls within a different relevant range than the static budget sales volume.

Question

Quizplus · Accepted Answer

A sales volume variance for fixed expenses occurs when the actual level of sales differs from the budgeted or expected level of sales. Option D describes a situation where the sales volume falls within a different relevant range than the static budget sales volume, which could result in a sales volume variance for fixed expenses. Options A, B, and C describe changes in specific fixed expenses, but these changes would not impact the sales volume variance for fixed expenses unless they directly affected production or sales volume.

What May Cause a Sales Volume Variance for Fixed Expenses