Question

when there is a difference between the flex operating income and the actual operating income, the difference could be attributable to: group of answer choices selling a different number of units than planned differences in price of inputs only differences in quantity of inputs only differences in prices and/or quantities of inputs

Answer 1

When the anticipated operating income and the actual operating income diverge, the gap may be due to variations in input pricing and/or quantities.

Operating income is a company's adjusted revenue that has been adjusted for depreciation and all other operating expenses. Operating expenses are the costs incurred to sustain the operation of the business.

Actual Operating Income is defined as Operating Income (as further defined herein) as determined for any fiscal year by the Company's Board of Directors based on the fiscal year's audited consolidated financial statements of the Company and its subsidiaries, which financial statements shall be conclusive and binding upon the Company and you. A flexible budget, sometimes known as a "flex" budget, adapts to variations in the actual amount of income received. In its most basic form, the flex budget will use percentages of revenue rather than the customary fixed quantities for some expenses. Better comparability between budgeted and actual performance is the outcome of this strategy.

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