Corrao Company had a static budgeted operating income of $8.6 million.Actual operating income was $6.4 million.The flexible budget operating income at the actual level of output is $7,000,000.What is the static-budget variance of operating income?
A) $1.6 million Favorable
B) $1.6 million Unfavorable
C) $2.2 million Favorable
D) $2.2 million Unfavorable

Question

Quizplus · Accepted Answer

The static-budget variance is the difference between the static budget and the actual results. Here, it is $8.6 million (static budget) - $6.4 million (actual) = $2.2 million Unfavorable.

Corrao Company Had a Static Budgeted Operating Income of $8