Question

The static​ budget, at the beginning of the​ month, for Amira Company​ follows: Static​ budget: Sales​ volume: 1 comma 000 ​units; Sales​ price: $ 70 per unit Variable​ costs: $ 33 per​ unit; Fixed​ costs: $ 36 comma 200 per month Operating​ income: $ 800 Actual​ results, at the end of the​ month, follows: Actual​ results: Sales​ volume: 990 ​units; Sales​ price: $ 74 per unit Variable​ costs: $ 35.00 per​ unit; Fixed​ costs: $ 33 comma 500 per month Operating​ income: $ 5 comma 110 Calculate the flexible budget variance for fixed costs.

Answer 1

$2700 Favourable

Step-by-step explanation:

A flexible budget variance is any difference between the results generated by a flexible budget and actual results. If Flexible budgeted value is greater than Actual results then it would be a favorable result or Vice versa.

Data

Budgeted fixed cost = $36,200

Actual Fixed cost =$33,500

Variance =?

Solution

Variance = Budgeted fixed cost - actual fixed cost

Vaiance = $36,200-$33500

Variance =$2700 Favorable