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John Moffat.
John Moffat.-
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maxpopper
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There is an mtq in kaplan kit that
In first month of production of new battery, actual sales were 18000 units and sales revenue achieved was 702000. Budgeted sales units were 17300. Based on this info which of following statement is true?
a) when budget is flexed, sales variance will include both sales volume and sales price variance
b) when budget is flexed, sales variance will only include sales volume variance
c) when budget is flexed, sales variance will only include sales price variance
d) when budget is flexed, sales variance will include sales mix and quantity and sales price varianceSir correct ans is C but can you please explain me the reason?
John Moffat
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When we flex the budget we rewrite the budget for the actual level of sales.
Therefore any difference between the flexed sales revenue and the actual sales revenue can only be due to the sales price being different from standard.
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