Question

answer all

37) The sales volume variance is the difference between the 37) Aj expected results in the flexible budget for the actual units sold and the static budget B) static budget and actual amounts due to differences in sales price C) flexible budget and static budget due to differences in fixed costs D) actual results and the expected results in the flexible budget for the actual units sold 38) 39) The static budget, at the beginning of the month, for Amira Company follows Sales volume: 1000 units; Sales price: $70.00 per unit Variable costs: $32.00 per unit Fixed costs: $36,800 per month Operating income: $1200 Actual results, at the end of the month, follows Actuel results Sales volume: 980 units; Sales price: $74.00 per unit Variable costs: $35.00 per unit, Fixed costs: $34,600 per month Operating income: $3620 Calculate the flexible budget variance for fixed costs. D) $2200 F A) $3180 F B) $2200 LU 39) A compary is analyzing its month-end results by comparing it to both static and flexible budgets During the month, the actual fixed costs were lower than the expected fixed costs as per the static budget This difference results in a(n) A) favorable sales volume variance for fixed costs B) unfavorable sales volume variance for fixed costs C) unfavorable flexible budget variance for fixed costs D) favorable flexible budget variance for fixed costs 40) Hercules Sports Equipment Company projected sales of 79,000 units at a unit sales price of $12 for the year. Actual sales for the year were 75,000 units at $14 per unit. Variable costs were budgeted 53 per unit, and the actual amount was $5 per unit. Budgeted fixed costs totaled $387,000, while actual fixed costs amounted to $450,000. What is the flexible budget variance for variable costs? A) $150,000 favorable $150,000 unfavorable B) $158,000 unfavorable D) $158,000 favorable

Answer 1

Ans. 37	Option A
	Explanations: Sales volume variance is the difference between flexible budget units sold and budgeted
	units sold. The flexible budget units sold is the actual units sold.
	Sales volume variance   =   Actual or flexible budget units sold - Budgeted or static budget units sold
Ans. 38	Option D
	Explanations & Calculations: Flexible budget variance is the difference between actual results and
	flexible budget.
	*Fixed cost in flexible budget is equal to the static budget.
	Flexible budget variance =   Flexible budgeted fixed cost - Actual fixed cost
	$36,800 - $34,600
	$2,200 favorable
	*The actual fixed cost is less than the budgeted, so the variance is favorable.
Ans. 39	Option D
	Explanations: Fixed cost in flexible budget is equal to the static budget.
	Flexible budget variance is the difference between actual results and
	flexible budget.
	*The actual fixed cost is less than the budgeted, so the variance is favorable.
Ans. 40	Option   C
	Flexible budget variance =    Actual variable cost - Flexible variable cost
	$375000 - $225,000
	$150,000	unfavorable
	*The actual variable cost is greater than the budgeted, so the variance is unfavorable.
	*Actual variable cost = Actual units sold * Actual Variable cost per unit
	75,000 * $5
	$375,000
	*Flexible budget variable cost = Actual units sold * Budgeted Variable cost per unit
	75,000 * $3
	$225,000