1. a
Calculate flexible budget operating income.
1. b
Calculate flexible
1. c
Calculate flexible budget variance, in terms of operating income and state whether it is favorable or unfavorable.
1. d
Calculate sales volume variance, in terms of contribution margin and state whether it is favorable or unfavorable.
1. e
Calculate sales volume, in terms of operating income and state whether it is favorable or unfavorable.
2.
Explain the reason for which the contribution margin sales volume variance and the operating income sales volume variance for the same period are likely to be identical.
3.
Explain the reason for which the contribution margin flexible-budget variance is likely to differ from the operating income flexible-budget variance for the same period.
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