If the flexible budget variance was $6,000 Favorable and the sales activity variance was $3,000 Favorable,then the static budget variance was ________.
A) $3,000 Favorable
B) $3,000 Unfavorable
C) $9,000 Favorable
D) $9,000 Unfavorable

Question

Quizplus · Accepted Answer

The flexible budget variance was $6,000 favorable, which means that actual results were better than what was expected in the flexible budget. The sales activity variance was $3,000 favorable, which means that actual sales activity was higher than the expected sales activity. Therefore, the static budget variance (the difference between the flexible budget and the static budget) must have been favorable too, because the actual results exceeded the expected results in both the flexible budget and the sales activity. The static budget variance should be the sum of the flexible budget variance and the sales activity variance, which is $6,000 + $3,000 = $9,000 favorable.

If the Flexible Budget Variance Was $6,000 Favorable and the Sales