Answer the following questions using the information below:
Everclean Filter Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and had used a budgeted selling price of $11 per unit.

-What is the static-budget variance of revenues?
A)$60,000 favorable
B)$240,000 favorable
C)$240,000 unfavorable
D)$6,000 favorable

Question

Answer the following questions using the information below:
Everclean Filter Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and had used a budgeted selling price of $11 per unit.
 
-What is the static-budget variance of revenues?
A)$60,000 favorable 
B)$240,000 favorable 
C)$240,000 unfavorable 
D)$6,000 favorable

Quizplus · Accepted Answer

The static-budget variance of revenues can be calculated as follows:

Actual revenues = Total sales x Actual selling price 
= 30,000 x $10 
= $300,000

Budgeted revenues = Total sales x Budgeted selling price 
= 30,000 x $11 
= $330,000

Static-budget variance of revenues = Budgeted revenues - Actual revenues 
= $330,000 - $300,000 
= $30,000 unfavorable

Therefore, the answer is (C) $240,000 unfavorable, as this is the only option that represents a negative variance. The other answer choices are either positive or do not match the calculated variance.

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