The following data are for the month of January for the Sterling Company:
Static budget data:
Sales of 9,000 pairs at $90 per pair
Variable costs of $69 per pair
Total fixed costs $108,000
Actual results:
Sales of 9,600 pairs at $87 per pair
Variable costs of $72 per pair
Total fixed costs $109,200
Required:
A)What is the static budget operating income?
B)What is the sales activity variance for operating income?
C)What is the flexible budget variance for operating income?

Question

Quizplus · Accepted Answer

The Answer of The following data are for the month of January for the Sterling Company:
Static budget data:
Sales of 9,000 pairs at $90 per pair
Variable costs of $69 per pair
Total fixed costs $108,000
Actual results:
Sales of 9,600 pairs at $87 per pair
Variable costs of $72 per pair
Total fixed costs $109,200
Required:
A)What is the static budget operating income?
B)What is the sales activity variance for operating income?
C)What is the flexible budget variance for operating income?

The Following Data Are for the Month of January for the Sterling