Homework Answers
| a) | |
| Sales Volume variance | |
| ( Actual hour -Budgeted hour) * Budgeted Price | |
| (40700-39000)*69 | |
| 117300 | Favorable |
| b) | |
| Flexible budget variance | |
| ( Actual price -Budgeted price )* Actual Hours | |
| (54-69)*40700 | |
| -610500 | |
| 610500 | Unfavorable |
|
c) Ans is NO Reason:- |
|
| Actual revenue | 40700*54 |
| 2197800 | |
| Budgeted revenue | 39000*69 |
| 2691000 | |
| Difference | -493200 |
| Since budgeted revenue is greater than actual revenue | |
| Hence, lowering the sales price decreases revenue. | |
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