Answer the following questions using the information below:
Barossa Valley Wines 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.
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 495000 \text { units } & 500000 \text { units } \
\text { Variable costs } & \$ 1250000 & \$ 1500000 \
\text { Fixed costs } & \$ 925000 & \$ 900000
\end{array}$$
-What is the static-budget variance of variable costs?
A)$200 000 favourable
B)$250 000 unfavourable
C)$250 000 favourable
D)$50 000 unfavourable

Question

Answer the following questions using the information below:
Barossa Valley Wines 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.
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 495000 \text { units } & 500000 \text { units } \
\text { Variable costs } & \$ 1250000 & \$ 1500000 \
\text { Fixed costs } & \$ 925000 & \$ 900000
\end{array}$$
-What is the static-budget variance of variable costs?
A)$200 000 favourable
B)$250 000 unfavourable
C)$250 000 favourable
D)$50 000 unfavourable

Quizplus · Accepted Answer

The static-budget variance of variable costs is calculated as the difference between the budgeted variable costs and the actual variable costs. Here, the budgeted variable costs are $1,500,000, and the actual variable costs are $1,250,000. The variance is $1,500,000 - $1,250,000 = $250,000 favourable.

Answer the Following Questions Using the Information Below: Barossa Valley

Answer the Following Questions Using the Information Below:
Barossa Valley