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 operating profit?
A)$31 000 unfavourable
B)$28 000 favourable
C)$28 000 unfavourable
D)$26 000 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 operating profit?
A)$31 000 unfavourable
B)$28 000 favourable
C)$28 000 unfavourable
D)$26 000 favourable

Quizplus · Accepted Answer

Static-budget variance of operating profit = (Actual units sold × Budgeted selling price per unit) – (Actual units sold × Actual selling price per unit) – (Actual variable costs) – (Actual fixed costs)= (206000 × $15) – (206000 × $14.50) – $965000 – $53000= $3090000 – $2993000 – $965000 – $53000= $31000 unfavourable

Answer the Following Questions Using the Information Below: V8 Engineering

Answer the Following Questions Using the Information Below:
V8 Engineering