Answer the following questions using the information below:
Bland Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and used a budgeted selling price of $10 per unit.
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 184000 \text { units } & 180000 \text { units } \
\text { Variable costs } & \$ 901600 & \$ 864000 \
\text { Fixed costs } & \$ 190000 & \$ 200000
\end{array}$$
-What is the static-budget variance of revenues?
A)$40 000 favourable
B)$4000 unfavourable
C)$40 000 unfavourable
D)$4000 favourable

Question

Answer the following questions using the information below:
Bland Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and used a budgeted selling price of $10 per unit.
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 184000 \text { units } & 180000 \text { units } \
\text { Variable costs } & \$ 901600 & \$ 864000 \
\text { Fixed costs } & \$ 190000 & \$ 200000
\end{array}$$
-What is the static-budget variance of revenues?
A)$40 000 favourable
B)$4000 unfavourable
C)$40 000 unfavourable
D)$4000 favourable

Quizplus · Accepted Answer

The static-budget variance of revenues is calculated as the difference between the actual revenue and the budgeted revenue. The budgeted revenue is based on the budgeted units sold (180,000 units) at the budgeted selling price ($10 per unit), which equals $1,800,000. The actual revenue is based on the actual units sold (184,000 units) at the same selling price, which equals $1,840,000. The variance is $1,840,000 (actual) - $1,800,000 (budgeted) = $40,000 favourable, because the actual revenue is higher than the budgeted revenue.

Answer the Following Questions Using the Information Below: Bland Corporation

Answer the Following Questions Using the Information Below:
Bland Corporation