Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. $\begin{array}{|l|r|r|c|l|l|l}
\hline & {\text { Actual }} & \begin{array}{c}

\text { Flexible } \
\text { Budget }
\end{array} & \begin{array}{c}
\text { Flexible } \
\text { Budget } \
\text { Variance }
\end{array} & \text { U/F } & \text { \% Variance } & \text { U/F } \
\hline \text { Sales Revenue } & \$ 688,000 & \$ 700,000 & & & & \
\hline \text { Variable expenses } & 309,000 & 320,000 & & & \
\hline \text { Contribution margin } & 379,000 & 380,000 & & & \
\hline \text { Traceable fixed expenses } & 371,000 & 368,000 & & & & \
\hline \text { Division margin } & \$ 8,000 & \$ 12,000 & & & &\
\hline
\end{array}$

How much is the percentage flexible budget variance for sales revenue?
A) 1.7 % F
B) 1.7 % U
C) 3.4 % U
D) 3.4 % F

Question

Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. $\begin{array}{|l|r|r|c|l|l|l} 
\hline & {\text { Actual }} & \begin{array}{c}

\text { Flexible } \
\text { Budget }
\end{array} & \begin{array}{c}
\text { Flexible } \
\text { Budget } \
\text { Variance }
\end{array} & \text { U/F } & \text { \% Variance } & \text { U/F } \
\hline \text { Sales Revenue } & \$ 688,000 & \$ 700,000 & & & & \
\hline \text { Variable expenses } & 309,000 & 320,000 & & & \
\hline \text { Contribution margin } & 379,000 & 380,000 & & & \
\hline \text { Traceable fixed expenses } & 371,000 & 368,000 & & & & \
\hline \text { Division margin } & \$ 8,000 & \$ 12,000 & & & &\
\hline 
\end{array}$

How much is the percentage flexible budget variance for sales revenue?
A) 1.7 % F
B) 1.7 % U
C) 3.4 % U
D) 3.4 % F

Quizplus · Accepted Answer

To calculate the percentage flexible budget variance for sales revenue, we need to use the formula:

($	ext{Actual Sales Revenue}$ - $	ext{Flexible Budget Sales Revenue}$) / $	ext{Flexible Budget Sales Revenue}$ x 100

Plugging in the given values, we get:

(\$688,000 - \$700,000) / \$700,000 x 100 = -1.7%

Since the percentage is negative, it means that the actual sales revenue is less than the flexible budget sales revenue. Therefore, the answer is option B, which indicates a 1.7% unfavorable variance.

Zhongfang Consumer Products Has a Small Car Division That Operates