Question

Tanger company has the following data: actual results static budget units 940 780 sales revenue 65,800 42,900 variable costs 28,200 21,840 contribution margin 37,600 21,060 fixed costs 31,000 10,000 operating income/(loss) 6,600 11,060 what is the static budget variance for operating income?

Answer 1

The static budget variance for operating income is calculated by subtracting the actual operating income from the static budget's projected operating income, resulting in an unfavorable variance of $4,460.

Step-by-step explanation:

The question is asking to calculate the static budget variance for operating income. To find this, we compare the actual operating income to the budgeted operating income. The actual operating income is given as $6,600, while the budgeted operating income, according to the static budget, is $11,060. the static budget variance for operating income is found by subtracting the actual operating income from the budgeted operating income: $11,060 - $6,600 = $4,460. Hence, there is an unfavorable static budget variance for operating income of $4,460, indicating that the actual operating income was less than what was budgeted.