A company's master budget for October is to manufacture and sell 30,000 units, for a total sales revenue of $270,000, total variable costs of $180,000, and total fixed costs of $24,000. The company actually manufactured and sold 32,000 units, and generated $45,000 of operating income in October.

The total flexible-budget (FB) variance for operating income in October, to the nearest dollar, was:
A) $3,600 unfavorable.
B) $6,000 unfavorable.
C) $15,400 unfavorable.
D) $21,000 unfavorable.
E) $27,000 unfavorable.

Question

A company's master budget for October is to manufacture and sell 30,000 units, for a total sales revenue of $270,000, total variable costs of $180,000, and total fixed costs of $24,000. The company actually manufactured and sold 32,000 units, and generated $45,000 of operating income in October.

The total flexible-budget (FB) variance for operating income in October, to the nearest dollar, was:

The total flexible-budget (FB) variance for operating income in October, to the nearest dollar, was:
A) $3,600 unfavorable.
B) $6,000 unfavorable.
C) $15,400 unfavorable.
D) $21,000 unfavorable.
E) $27,000 unfavorable.

Quizplus · Accepted Answer

The Answer of A company's master budget for October is to manufacture and sell 30,000 units, for a total sales revenue of $270,000, total variable costs of $180,000, and total fixed costs of $24,000. The company actually manufactured and sold 32,000 units, and generated $45,000 of operating income in October.

The total flexible-budget (FB) variance for operating income in October, to the nearest dollar, was:
A) $3,600 unfavorable.
B) $6,000 unfavorable.
C) $15,400 unfavorable.
D) $21,000 unfavorable.
E) $27,000 unfavorable.

A Company's Master Budget for October Is to Manufacture and Sell