Question

Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $12 each and used a budgeted selling price of $12 per unit. Actual Budgeted Units sold 48,000 units 34,000 units Variable costs $170,000 $156,000 Fixed costs $42,000 $57,000 What is the static−budget variance of operating​ income?

Answer 1

Static−budget variance of operating​ income is $169,000F

Step-by-step explanation:

Actual Budgetet

Sales $576,000 $408,000 $168,000

Variable cost $170,000 $156,000 $14,000

Contribution margin $406,000 $252,000 $154,000

Less: Fixed cost $42,000 $57,000 -$15,000

Net Income / (Loss) $364,000 $195,000 $169,000 Favourable

Workings

Sales: Actual 48,000 units * $12= 576,000

Budgeted 34,000 units * $12= 408,000