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Solution-2 If the both actual and budget operation are in relevant range than the master budget of the actual operating level and also for the

Solution-2

If the both actual and budget operation are in relevant range than the master budget of the actual operating level and also for the flexible budget both have the similar fixed costs. Because master and flexible budget less from the same total fixed costs from the contribution margin for calculating the operating income, the sales related volume variance will calculate in terms of the contribution margin and the operating income.

Solution-3

The budgeted amount is different from the actual fixed costs for the period. As the result operating income of flexible-budget variance are different from the contribution margin flexible-budget variance. This difference will be equal to the total flexible-budget fixed costs variance.

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