Question

What is Adger’s revenue variance for May?

A. Actual revenue
B. Budgeted revenue
C. Variance analysis
D. Forecasted revenue

Answer 1

To find Adger's revenue variance for May, subtract the forecasted revenue from the actual revenue. A positive result indicates a favorable variance, while a negative result indicates an unfavorable variance.

Step-by-step explanation:

To calculate Adger’s revenue variance for May, you would need two specific pieces of information: the actual revenue for May and the forecasted revenue for May. The revenue variance is the difference between these two figures. The formula to find revenue variance is Actual Revenue minus Forecasted Revenue. A positive result indicates a favorable variance, where the actual revenue is greater than the forecasted revenue. Conversely, a negative result indicates an unfavorable variance, where the actual revenue is less than the forecasted revenue.

Here’s a step-by-step process on how to calculate the variance:

1. 
   
3. Identify the actual revenue Adger earned in May.
4. 
   
6. Identify the forecasted revenue for Adger for the same period.
7. 
   
9. Subtract the forecasted revenue from the actual revenue.
10. 
    
12. The result is Adger’s revenue variance for May.

For example, if Adger’s actual revenue for May was $120,000 and the forecasted revenue was $100,000, the calculation would be: $120,000 (Actual Revenue) - $100,000 (Forecasted Revenue) = $20,000. Therefore, Adger’s revenue variance for May would be a $20,000 favorable variance.