Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. $$\begin{array} { | l | r | r | r | l | l | l | }
\hline & \text { Actual } & \begin{array} { c }
\text { Flexible } \
\text { Budget }
\end{array} & \begin{array} { c }
\text { Flexible } \
\text { Budget } \
\text { Variance }
\end{array} & \text { U/F } & \text { \% Variance } & \text { U/F } \
\hline \text { Sales Revenue } & \$ 688,000 & \$ 700,000 & & & & \
\hline \text { Variable expenses } & 309,000 & 320,000 & & & & \
\hline \text { Contribution margin } & 379,000 & 380,000 & & & & \
\hline \text { Traceable fixed expenses } & 371,000 & 368,000 & & & & \
\hline \text { Division margin } & \$ 8,000 & \$ 12,000 & & & & \
\hline
\end{array}$$
- How much is the percentage flexible budget variance for sales revenue?

Question

Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter. $$\begin{array} { | l | r | r | r | l | l | l | } 
\hline & \text { Actual } & \begin{array} { c } 
\text { Flexible } \
\text { Budget }
\end{array} & \begin{array} { c } 
\text { Flexible } \
\text { Budget } \
\text { Variance }
\end{array} & \text { U/F } & \text { \% Variance } & \text { U/F } \
\hline \text { Sales Revenue } & \$ 688,000 & \$ 700,000 & & & & \
\hline \text { Variable expenses } & 309,000 & 320,000 & & & & \
\hline \text { Contribution margin } & 379,000 & 380,000 & & & & \
\hline \text { Traceable fixed expenses } & 371,000 & 368,000 & & & & \
\hline \text { Division margin } & \$ 8,000 & \$ 12,000 & & & & \
\hline
\end{array}$$
- How much is the percentage flexible budget variance for sales revenue?

Quizplus · Accepted Answer

The flexible budget variance for sales revenue is calculated as: $(Actual - Flexible Budget) / Flexible Budget \times 100$. Here, $(\$688,000 - \$700,000) / \$700,000 \times 100 = -1.7\%$, which is unfavorable (U).

Zhongfang Consumer Products Has a Small Car Division That Operates