Global Engineering's actual operating income for the current year is $50,000. The flexible budget operating income for actual volume achieved is $40,000, while the static budget operating income is $53,000. What is the sales volume variance for operating income

The sales volume variance for operating income is calculated by comparing the flexible budget, which is adjusted to the actual level of activity, to the static budget, which is based on the planned level of activity at the beginning of the period. It measures the impact of the actual number of units sold being different from the number of units expected to be sold (as per the static budget) on operating income.

Here is the formula for computing the sales volume variance for operating income: Sales Volume Variance = (Actual Volume - Budgeted Volume) x Standard Profit per Unit

However, the question provides the operating incomes, not the units or standard profit per unit. Therefore, we'll use the operating incomes directly.

First, we find out the difference between the flexible budget operating income (at actual volume) and the static budget operating income (at budgeted volume). So, the formula simplifies to: Sales Volume Variance = Flexible Budget Operating Income - Static Budget Operating Income

Given values in the question: - Flexible Budget Operating Income = $40,000 (This is based on the actual volume achieved) - Static Budget Operating Income = $53,000 (This is based on the original planned/budgeted volume)

Now, we perform the calculation: Sales Volume Variance = $40,000 - $53,000 Sales Volume Variance = -$13,000

The negative variance indicates that the actual sales volume resulted in a lower operating income than originally planned in the static budget. This would typically mean that the number of units sold was less than the number anticipated in the static budget.