In analyzing company operations,the controller of the Carson Corporation found a $250,000 favorable flexible budget revenue variance.The variance was calculated by comparing the actual results with the flexible budget.This variance can be wholly explained by: (CMA adapted)
A) the total flexible budget variance.
B) the total static budget variance.
C) changes in unit selling prices.
D) changes in the number of units solD.
Since the flexible budget is based on actual output,the variation could only come from the selling price.

Question

Quizplus · Accepted Answer

Since the flexible budget is based on actual output, and the total flexible budget variance includes both revenue and cost variances, the $250,000 favorable revenue variance can only be explained by a change in unit selling prices. Therefore, choice C is the best answer.

In Analyzing Company Operations,the Controller of the Carson Corporation Found