Folsom Fashions sells a line of women's dresses. Folsom's performance report for November Year 1 follows. Actual : Dresses Sold: 5000, Sales 235,000, variable cost is 145,000 contribution margin is 90,000, fix cost is 84,000 and operating income is 6,000Budget: Dresses Sold: 6000, Sales 300,000, variable costs: 180000, contribution margin is 120,000, fixed costs is 80000, and operating income is 40,000The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income. The variable cost flexible budget variance for November is: (A) $4,000 unfavorable. (B) $5,000 favorable. (C) $5,000 unfavorable. (D) $4,000 favorable.
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