Flexed Budget for October Actual for October

Output 40,000 units 40,000 units

Sales $500,000 $400,000

Raw materials $100,000 $88,000

Labour $250,000 $180,000

Overheads $325,000 $375,000

The adverse (unfavourable) sales variance of $100,000 is best explained by-:

a. an increase in the expenses incurred by the business in the period

b. the sales manager and sales team not making the target level of sales

c. the price the units were sold for was less than budgeted

d. it is not possible to tell from this information