Sunday, June 5, 2011

What is the static-budget variance of variable costs?

ACCOUNTING

Multiple Choice

Abernathy 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



Actual Budgeted

Units sold 92,000 units 90,000 units

Variable costs $450,800 $432,000

Fixed costs $ 95,000 $100,000



What is the static-budget variance of variable costs?

a. $1,200 favorable

b. $18,800 unfavorable

c. $20,000 favorable

d. $1,200 unfavorable

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