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: $$\begin{array} { l r r }
& \underline { \text { Budgeted } } & \underline { \text { Actual } } \
\text { Sales } & \$ 180,000 & \$ 210,000 \
\text { Research and development cost } & 25,000 & 20,000 \
\text { Interest revenue } & 7,600 & 7,000 \
\text { Cost of goods sold } & 60,000 & 65,000 \
\text { Marketing costs } & 45,000 & 45,000
\end{array}$$ The research and development cost variance could be explained by:

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: $$\begin{array} { l r r } 
& \underline { \text { Budgeted } } & \underline { \text { Actual } } \
\text { Sales } & \$ 180,000 & \$ 210,000 \
\text { Research and development cost } & 25,000 & 20,000 \
\text { Interest revenue } & 7,600 & 7,000 \
\text { Cost of goods sold } & 60,000 & 65,000 \
\text { Marketing costs } & 45,000 & 45,000
\end{array}$$ The research and development cost variance could be explained by:

Quizplus · Accepted Answer

The research and development cost variance is favorable since the actual costs ($20,000) are lower than the budgeted costs ($25,000), which could be explained by efficient cost management.

At the End of 2019, Dubai Mission Prepared Its Master