If budgeted sales revenue is $220 000 and actual sales revenue is $200 000, and budgeted expenses are $115 000 and actual expenses are $135 000, the profit variance for the period is:
A) $20 000 F.
B) $20 000 U.
C) $40 000 F.
D) $40 000 U.

Question

Quizplus · Accepted Answer

The profit variance is calculated by comparing the budgeted profit to the actual profit. Budgeted profit is $220,000 - $115,000 = $105,000. Actual profit is $200,000 - $135,000 = $65,000. The variance is $105,000 - $65,000 = $40,000 unfavorable (U).

If Budgeted Sales Revenue Is $220 000 and Actual Sales