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 operating income?

Question

Quizplus · Accepted Answer

The flexible budget variance for operating income is calculated by comparing the actual results to the flexible budget. The flexible budget is based on actual sales volume but uses budgeted costs and prices. The variance is unfavorable because the actual sales price and variable costs were worse than budgeted, leading to lower operating income than expected.

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