Question

Compute the variances in dollar amount and in percentage. (Round to the nearest whole percent.) Indicate whether the variance is favorable (F) or unfavorable (U). Budgeted Income Amount $500.00 Actual Amount $400.00

Dollar Variance $
Percent Variance %
F or U

Answer 1

dollar variance: -100

percent variance: -20

U

Answer 2

Dollar Variance is -$100

Percent Variance is -20%

Since the actual amount received is less than the budgeted amount, the variance is unfavorable (U).

We calculate Dollar Variance as
`Actual Income - Budgeted Income`.

`Dollar Variance = 400 - 500 = -100`

Next calculate percent variance as
`(Dollar Variance)/(Budgeted Income)*100`

`Percent Variance = (-100)/(500) * 100 = -0.20*100`

Percentage Variance = -20%.