The Maryland Cheese Company completed the flexible budget analysis for the second quarter, which is given below.

	Actual Results	Flexible Budget Variance		Flexible Budget	Sales Volume Variance		Static Budget
Units	12,900	0		12,900	900	F	12,000
Sales Revenue	$62,740	$1,350	U	$64,090	$4,020	F	$60,070
Variable Costs	27,540	590	U	26,950	$1,660	U	25,290
Contribution Margin	$35,200	$1,940	U	$37,140	$2,360	F	$34,780
Fixed Costs	34,250	220	U	34,030	$0		34,030
Operating Income/(Loss)	$950	$2,160	U	$3,110	$2,360	F	$750

Which of the following statements would be a correct analysis of the flexible budget variance for fixed expenses?

A.

increase in sales volume

B.

increase in variable cost per unit

C.

decrease in sales price per unit

D.

increase in fixed costs