The California Fitness Company completed the flexible budget analysis for the second quarter, which is given below
Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget
Units 12,860 0 12,860 1,060 F 11,800
Sales Revenue $62,720 $1,290 U $64,010 $4,010 F $60,000
Variable Costs 27,620 720 U 26,900 $1,700 U 25,200
Contribution Margin $35,100 $2,010 U $37,110 $2,310 F $34,800
Fixed Costs 34,250 250 U 34,000 $0 34,000
Operating Income/(loss) $850 $2,260 U $3,110 $2,310 F $800
Which of the following statements would be a correct analysis of the flexible budget variance for variable costs?
A) decrease in sales price per unit
B) increase in variable cost per unit
C) increase in sales volume
D) increase in fixed costs
B
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