Given the following data, calculate total profit variance. $$\begin{array} { l l l }
& \text { Master Budget } & \text { Actual Results } \
\text { Revenue } & \$ 73,000 & \$ 75,000 \
\text { Variable costs } & \$ 23,000 & \$ 20,000 \
\text { Contribution marg in } & \$ 50,000 & \$ 55,000 \
\text { Fixed costs } & \$ 15,000 & \$ 10,000 \
\text { Profit before taxes } & \$ 35,000 & \$ 45,000
\end{array}$$
A)$2,000 Favorable.
B)$2,000 Unfavorable.
C)$10,000 Unfavorable.
D)$10,000 Favorable.
E)$5,000 Favorable.

Question

Given the following data, calculate total profit variance. $$\begin{array} { l l l } 
& \text { Master Budget } & \text { Actual Results } \
\text { Revenue } & \$ 73,000 & \$ 75,000 \
\text { Variable costs } & \$ 23,000 & \$ 20,000 \
\text { Contribution marg in } & \$ 50,000 & \$ 55,000 \
\text { Fixed costs } & \$ 15,000 & \$ 10,000 \
\text { Profit before taxes } & \$ 35,000 & \$ 45,000
\end{array}$$
A)$2,000 Favorable.
B)$2,000 Unfavorable.
C)$10,000 Unfavorable.
D)$10,000 Favorable.
E)$5,000 Favorable.

Quizplus · Accepted Answer

The total profit variance is calculated as the difference between the actual profit and the budgeted profit. Here, the actual profit is $45,000 and the budgeted profit is $35,000, resulting in a $10,000 favorable variance.

Given the Following Data, Calculate Total Profit Variance A)$2,000 Favorable