Answer the following questions using the information below:
The actual information pertains to the month of September. As part of the budgeting process, Kriger Fencing Company developed the following static budget for September. Kriger is in the process of preparing the flexible budget and understanding the results.

-The primary reason for low operating profits was:
A)the variable-cost variance
B)increased fixed costs
C)a poor management accounting system
D)lower sales volume than planned

Question

Answer the following questions using the information below:
The actual information pertains to the month of September. As part of the budgeting process, Kriger Fencing Company developed the following static budget for September. Kriger is in the process of preparing the flexible budget and understanding the results.
    
-The primary reason for low operating profits was:
A)the variable-cost variance 
B)increased fixed costs 
C)a poor management accounting system 
D)lower sales volume than planned

Quizplus · Accepted Answer

The static budget was developed assuming a certain level of sales volume, but if the actual sales volume in September was lower than planned, it would lead to lower operating profits. Therefore, the primary reason for low operating profits is likely to be D, lower sales volume than planned.

Answer the Following Questions Using the Information Below