Western Outfitters Mountain Sports projected 2011 sales of 75,000 units at a unit sale price of $12.00. Actual 2011 sales were 72,000 units at $14.00 per unit. Variable costs were budgeted at $4.00 per unit; actual amount was $4.75 per unit. Budgeted fixed costs totaled $375,000 while actual fixed costs amounted to $400,000. What is the flexible budget variance for operating income?

Question

Quizplus · Accepted Answer

B) Calculations:
(72,000 × $14.00) - (72,000 × $4.75) - $400,000 = $266,000
(72,000 × $12.00) - (72,000 × $4.00) - $375,000 = $201,000
$266,000 - $201,000 = $65,000

Western Outfitters Mountain Sports Projected 2011 Sales of 75,000 Units