Answer the following questions using the information below:
V8 Engineering Pty used the following data to evaluate their current operating system.The company sells items for $14.50 each and had used a budgeted selling price of $15 per unit.
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 206000 \text { units } & 200000 \text { units } \
\text { Variable costs } & \$ 965000 & \$ 950000 \
\text { Fixed costs } & \$ 53000 & \$ 50000
\end{array}$$
-What is the static-budget variance of revenues?
A)$13 000 favourable
B)$6000 favourable
C)$13 000 unfavourable
D)$90 000 favourable

Question

Answer the following questions using the information below:
V8 Engineering Pty used the following data to evaluate their current operating system.The company sells items for $14.50 each and had used a budgeted selling price of $15 per unit.
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Units sold } & 206000 \text { units } & 200000 \text { units } \
\text { Variable costs } & \$ 965000 & \$ 950000 \
\text { Fixed costs } & \$ 53000 & \$ 50000
\end{array}$$
-What is the static-budget variance of revenues?
A)$13 000 favourable
B)$6000 favourable
C)$13 000 unfavourable
D)$90 000 favourable

Quizplus · Accepted Answer

The static-budget variance of revenues is calculated as the difference between the actual revenue and the budgeted revenue based on the budgeted selling price and budgeted units. Budgeted revenue is $15 per unit * 200,000 units = $3,000,000. Actual revenue is $14.50 per unit * 206,000 units = $2,987,000. The variance is $3,000,000 - $2,987,000 = $13,000 unfavourable.

Answer the Following Questions Using the Information Below: V8 Engineering

Answer the Following Questions Using the Information Below:
V8 Engineering