The Boyle Company estimated that April sales would be 150,000 units with an average selling price of $6.00.Actual sales for April were 149,000 units,and average selling price was $6.12. The sales revenue flexible budget variance was:
A) $6,120 favorable.
B) $6,000 unfavorable.
C) $17,880 favorable.
D) $17,880 unfavorable.

Question

Quizplus · Accepted Answer

The flexible budget for sales revenue is calculated based on actual units sold at the budgeted selling price. Therefore, the flexible budget for sales revenue is 149,000 units * $6.00 = $894,000. The actual sales revenue is 149,000 units * $6.12 = $911,880. The variance is $911,880 - $894,000 = $17,880, which is favorable because the actual revenue is higher than the budgeted revenue.

The Boyle Company Estimated That April Sales Would Be 150,000