Erwin Plumbing Materials Company Has a Sales Office That Sells

Multiple Choice

Erwin Plumbing Materials Company has a sales office that sells water pipes to construction companies.The sales office is a revenue center and prepares a monthly responsibility report.The partially completed responsibility report is provided. $$\begin{array}{l}\text { Revenue Center Responsibility Report }\\\begin{array} { | c | c | c | c | c | c | c | c | } \hline \begin{array} { c } \text { Product } \\\text { Type }\end{array} & \begin{array} { c } \text { Actual } \\\text { Sales } \\\text { Revenue }\end{array} & \begin{array} { c } \text { Flexible } \\\text { Budget } \\\text { Variance }\end{array} & \text { U/F } & \begin{array} { c } \text { Flexible } \\\text { Budget }\end{array} & \begin{array} { c } \text { Sales } \\\text { Volume } \\\text { Variance }\end{array} & \text { U/F } & \begin{array} { c } \text { Static } \\\text { Budget }\end{array} \\\hline 40 \text { inch } & \$ 31,700 & & & \$ 30,750 & & & \$ 40,800 \\\hline 36 \text { inch long } & 40,150 & & & 42,200 & & & 33,000 \\\hline 36 \text { inch short } & 36,200 & & & 33,100 & & & 31,000 \\\hline 32 \text { inch } & 19,100 & & & 20,000 & & & 28,400 \\\hline\end{array}\end{array}$$ The company uses management by exception to address flexible budget variances.On which product type would the company first focus?

A) 40 inch
B) 36 inch long
C) 36 inch short
D) 32 inch