Question

Corporation sold laser pointers for $ 14 each in 2017. Its budgeted selling price was $ 13 per unit. Other information related to its performance is given​ below: Actual Budgeted Units made and sold 27,300 27,600 Variable costs $100,000 $5 per unit Fixed costs $52,000 $48,000 Calculate Zoar​'s static budget variance for​ (a) revenues,​ (b) variable​ costs, (c) fixed​ costs, and​ (d) operating income. Begin by determining all of the actual​ amounts, then the static budget​ amounts, and finally the​ static-budget variances. Label each variance as favorable​ (F) or unfavorable​ (U)

Answer 1

Static budget variance

a. revenue variance = budgeted revenue - actual revenue

= ( $13*27,600 ) - ( $14*27,300)

= $358,800 - $382,200

= $23,400 F

b Variable cost variance = ($5* 27,600) - $100,000

= $138,000 - $100,000

= $38,000 F

c. fixed cost variance = $48,000 - $52,000

= $4,000 U

d. operating income = $23,400 F + $38,000 F + $4,000 U

= $57,400 F

Step-by-step explanation: