Chapter 24, Problem 4CP

To determine

Flexible budget variance:

The variance derived from the difference between the actual results and flexible budget is called a flexible budget variance. As both the actual results and flexible is prepared based on the actual level of activity, the comparison shows the true variance in revenue and spending of a company.

To determine:

What was the effect on Trolley’s operating income of selling 500 sets more than the static budget level of sales.