Farm Bureau Insurance Company had a static budgeted operating income of $8.6 million; however, actual income was $6.4 million._____ is the static-budget variance of operating income.
A)$6.4 million favorable
B)$8.6 million unfavorable
C)$2.2 million favorable
D)$2.2 million unfavorable

Question

Quizplus · Accepted Answer

Static-budget variance is calculated as actual income minus budgeted income. Therefore, the static-budget variance in this scenario is $6.4 million minus $8.6 million, which equals a unfavorable variance of $2.2 million. Thus, the correct choice is D.

Farm Bureau Insurance Company Had a Static Budgeted Operating Income