Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,900 units, but its actual level of activity was 5,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting:
Actual results for May:
The revenue variance for May would be closest to:
A) $6,920 F
B) $6,920 U
C) $8,224 U
D) $8,224 F

Question

Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,900 units, but its actual level of activity was 5,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting:
 Actual results for May:
 The revenue variance for May would be closest to:
A) $6,920 F 
B) $6,920 U 
C) $8,224 U 
D) $8,224 F

Quizplus · Accepted Answer

11eacbfc_c592_ca1b_8ffe_6d7d02bbd5d5_TB7552_00 Because the actual revenue is greater than the flexible budget, the variance is favorable (F).

Piechocki Corporation Manufactures and Sells a Single Product