Baugus Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During August, the company budgeted for 6,900 units, but its actual level of activity was 6,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:
-The revenue variance for August would be closest to:
A) $1,450 F
B) $1,450 U
C) $430 F
D) $430 U

Question

Baugus Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During August, the company budgeted for 6,900 units, but its actual level of activity was 6,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August: 
-The revenue variance for August would be closest to:
A) $1,450 F 
B) $1,450 U 
C) $430 F 
D) $430 U

Quizplus · Accepted Answer

The revenue variance is the difference between the actual revenue and the budgeted revenue. In this case, the actual revenue is $10,450 and the budgeted revenue is $9,000. Therefore, the revenue variance is $10,450 - $9,000 = $1,450. Since the actual revenue is greater than the budgeted revenue, the revenue variance is favorable, which is indicated by the "F" in the answer choice.

Baugus Corporation Manufactures and Sells a Single Product