Coderre Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 7,800 units, but its actual level of activity was 7,780 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting: Actual results for July: The revenue variance for July would be closest to:
A)$6,664 U
B)$6,664 F
C)$6,070 U
D)$6,070 F

Question

Coderre Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, the company budgeted for 7,800 units, but its actual level of activity was 7,780 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting:  Actual results for July:  The revenue variance for July would be closest to:
A)$6,664 U 
B)$6,664 F 
C)$6,070 U 
D)$6,070 F

Quizplus · Accepted Answer

Revenue variance = (Actual price - Budgeted price) x Actual quantity

= ($27.60 - $27) x 7,780 units

= $0.60 x 7,780 units

= $4,668 U

Therefore, the revenue variance is $4,668 U, which is closest to option C ($6,070 U). Option A and B are incorrect as they are not even close to the calculated value. Option D is also incorrect as it represents a favorable variance, while the calculated variance is unfavorable.

Coderre Corporation Manufactures and Sells a Single Product