Chapter 7 1) Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $19 each and used a budgeted selling price of S19 per unit Budgeted 39,000 units $152,000 s50,000 Actual 48,000 units $167,000 $41,000 Units sold Variable costs Fixed costs What is the static-budget variance of revenues? A) $171,000 favorable B) $171,000 unfavorable C) 86,000 favorable D) $9,000 unfavorable

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20 March, 05:45

Chapter 7 1) Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $19 each and used a budgeted selling price of S19 per unit Budgeted 39,000 units $152,000 s50,000 Actual 48,000 units $167,000 $41,000 Units sold Variable costs Fixed costs What is the static-budget variance of revenues? A) $171,000 favorable B) $171,000 unfavorable C) 86,000 favorable D) $9,000 unfavorable

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Joey Berry · Answer 1

A) $171,000 favorable

Explanation:

Static Budget variance is calculated by simply taking difference of budgeted values and actual values.

Static budget Variance report of Lincoln Corporation

Budgeted Actual Variance Status

Units sold 39,000 48,000 9000 Favorable

Revenue (@$19) $741,000 $912,000 $171,000 Favorable

Variable costs $152,000 $167,000 $15,000 Unfavorable

Fixed costs $50,000 $41,000 $9,000 Favorable

As Sales is increased by 9000 units and $171,000, the increase in sale is a favourable varince. So, correct option is A) $171,000 favorable.