In 2018, Flowers Ltd Budgeted Its Sales Volume at 10,000

In 2018, Flowers Ltd budgeted its sales volume at 10,000 units. Actual volume was 9,800 units. If Flowers Ltd uses the static budget to calculate variances and assuming that inventory levels are insignificant, which of the following statements is true?

A) Budgeted variable costs will be overstated compared to actual variable costs
B) Profits will be less than expected
C) Profits will be more than expected due to favourable cost variances
D) Sales managers will not receive a bonus

Correct Answer:

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