Answer the following questions using the information below:
Bland Corporation 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.
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 184000 \text { units } & 180000 \text { units } \
\text { Variable costs } & \$ 901600 & \$ 864000 \
\text { Fixed costs } & \$ 190000 & \$ 200000
\end{array}$$
-What is the static-budget variance of operating profit?
A)$12 400 unfavourable
B)$7600 unfavourable
C)$12 400 favourable
D)$7600 favourable

Question

Answer the following questions using the information below:
Bland Corporation 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.
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 184000 \text { units } & 180000 \text { units } \
\text { Variable costs } & \$ 901600 & \$ 864000 \
\text { Fixed costs } & \$ 190000 & \$ 200000
\end{array}$$
-What is the static-budget variance of operating profit?
A)$12 400 unfavourable
B)$7600 unfavourable
C)$12 400 favourable
D)$7600 favourable

Quizplus · Accepted Answer

The static-budget variance of operating profit is calculated by comparing the actual results to the budgeted figures. The budgeted operating profit is calculated as follows: Budgeted revenue (180,000 units * $10) = $1,800,000 - Budgeted variable costs ($864,000) - Budgeted fixed costs ($200,000) = $736,000. The actual operating profit is: Actual revenue (184,000 units * $10) = $1,840,000 - Actual variable costs ($901,600) - Actual fixed costs ($190,000) = $748,400. The variance is $748,400 (actual) - $736,000 (budgeted) = $12,400 favourable, indicating the company performed better than expected.

Answer the Following Questions Using the Information Below: Bland Corporation

Answer the Following Questions Using the Information Below:
Bland Corporation