Question

6) Lincoln Corporation used the following data to evaluate their current operating system. Th sells items for $19 each and used a budgeted selling price of $19 per unit. Units sold Variable costs Fixed costs Actual 48,000 units $167,000 $41,000 Budgeted 39,000 units $152,000 $50,000 What is the static-budget variance of revenues?

Answer 1

Answer -

Q. 6) Answer -

Static budget variance of revenues = Actual revenue - Budgeted revenue

Here,

Actual revenue = 48000 units * $19 selling price = $912000

Budgeted revenue = 39000 units * $19 selling price = $741000

So,

Static budget variance of revenues = $912000 - $741000

Static budget variance of revenues = $171000 Favorable

Q. 7) Answer -

Compared to variable overhead costs​ planning, fixed overhead cost planning has an additional strategic issue beyond undertaking only essential activities and efficient operations. That additional requirement is best described​ as :

Choosing the appropriate level of capacity that will benefit the company in the​ long-run