The Actual Information Pertains to the Month of September The Primary Reason for Low Operating Profits Was ________

Multiple Choice

The actual information pertains to the month of September.As part of the budgeting process,Kriger Fencing Company developed the following static budget for September.Kriger is in the process of preparing the flexible budget and understanding the results. $\begin{array}{lccc} & \text { Actual } & \text { Flexible } & \text { Static } \\& \text { Results } & \text { Budget } & \text { Budget } \\\text { Sales volume (in units) } & 10,000 & & 12,500\\\text { Sales revenues } & \$ 500,000 & \$ & \$ 625,000 \\\text { Variable costs } & 256,000 & \$ & 300,000\\\text { Contribution margin }& 244,000& \$ &325,000\\\text { Fixed costs } & 229,000 & \$ & 225,000\\\text { Operating profit } & \$ 15,000& \$& \$ 100,000\end{array}$ The primary reason for low operating profits was ________.

A) the variable-cost variance
B) increased fixed costs
C) a poor management accounting system
D) lower sales volume than planned