Kid Adventures Company projected current year sales of 3,600 swing sets at a unit sale price of $225.00.Actual current year sales were 3,300 units at $215.00 per unit.Actual variable costs,budgeted at $166.00 per unit,totaled $175.00 per unit.Budgeted fixed costs totaled $122,000 while actual fixed costs amounted to $118,000.
-What is the flexible budget variance for total expenses?

Question

Quizplus · Accepted Answer

The flexible budget variance for total expenses is calculated by comparing the actual expenses to the flexible budget expenses based on actual sales volume. The flexible budget expenses are calculated as: (3,300 units * $166 variable cost) + $122,000 fixed costs = $667,800. Actual expenses are: (3,300 units * $175 variable cost) + $118,000 fixed costs = $695,500. The variance is $695,500 - $667,800 = $27,700 unfavorable. However, since the choices provided do not match this calculation, the closest option is $25,700 unfavorable.

Kid Adventures Company Projected Current Year Sales of 3,600 Swing