Use the information below to answer the following question(s).
Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for $10 per pack. The $10 selling price is also the budgeted selling price.

-A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance $10,000 U; revenues variance $400,000 F; contribution margin variance $60,000 F Required: What is the total static-budget variance?
A) $50,000 F
B) $50,000 U
C) $230,000 F
D) $230,000 U
E) $390,000 F

Question

Use the information below to answer the following question(s).
Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for $10 per pack. The $10 selling price is also the budgeted selling price.
 
-A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance $10,000 U; revenues variance $400,000 F; contribution margin variance $60,000 F Required: What is the total static-budget variance?
A) $50,000 F 
B) $50,000 U 
C) $230,000 F 
D) $230,000 U 
E) $390,000 F

Quizplus · Accepted Answer

The total static-budget variance is the sum of the fixed costs variance, revenues variance, and contribution margin variance. In this case, the total static-budget variance is $10,000 U + $400,000 F + $60,000 F = $50,000 F.

Use the Information Below to Answer the Following Question(s)