A company is analyzing month-end results compared to both static and flexible budgets. This month the actual selling price was higher than projected in the static budget. What kind of variance would that produce?

Question

Quizplus · Accepted Answer

The actual selling price being higher than projected in the static budget means that the company has generated more revenue per unit sold. This is a favorable situation in terms of sales revenues, as the company is earning more than anticipated. Therefore, it would produce a favorable flexible budget variance for sales revenues.

A Company Is Analyzing Month-End Results Compared to Both Static