At the end of 2019, Dubai Mission prepared its master budget for 2020. Selected amounts from that budget, along with actual results for 2020, are presented below: $$\begin{array} { l r r }
& \underline { \text { Budgeted } } & \underline { \text { Actual } } \
\text { Sales } & \$ 180,000 & \$ 210,000 \
\text { Research and development cost } & 25,000 & 20,000 \
\text { Interest revenue } & 7,600 & 7,000 \
\text { Cost of goods sold } & 60,000 & 65,000 \
\text { Marketing costs } & 45,000 & 45,000
\end{array}$$ Dubai Mission's total budget variance for the data provided is:

Question

At the end of 2019, Dubai Mission prepared its master budget for 2020. Selected amounts from that budget, along with actual results for 2020, are presented below: $$\begin{array} { l r r } 
& \underline { \text { Budgeted } } & \underline { \text { Actual } } \
\text { Sales } & \$ 180,000 & \$ 210,000 \
\text { Research and development cost } & 25,000 & 20,000 \
\text { Interest revenue } & 7,600 & 7,000 \
\text { Cost of goods sold } & 60,000 & 65,000 \
\text { Marketing costs } & 45,000 & 45,000
\end{array}$$ Dubai Mission's total budget variance for the data provided is:

Quizplus · Accepted Answer

The total budget variance is calculated by comparing the actual results to the budgeted amounts. A favorable variance occurs when actual revenue is higher than budgeted or when actual expenses are lower than budgeted. An unfavorable variance occurs in the opposite scenarios. Here's the breakdown:- Sales: Actual sales ($210,000) were $30,000 higher than budgeted ($180,000), which is favorable.- Research and development cost: Actual costs ($20,000) were $5,000 lower than budgeted ($25,000), which is favorable.- Interest revenue: Actual revenue ($7,000) was $600 lower than budgeted ($7,600), which is unfavorable.- Cost of goods sold: Actual costs ($65,000) were $5,000 higher than budgeted ($60,000), which is unfavorable.- Marketing costs: Actual costs ($45,000) were equal to the budgeted costs ($45,000), so there's no variance.Adding these variances together: $30,000 (favorable) + $5,000 (favorable) - $600 (unfavorable) - $5,000 (unfavorable) = $29,400 favorable.

At the End of 2019, Dubai Mission Prepared Its Master