Regier Company had planned for operating profit of $10 million in the master budget but actually achieved operating profit of only $7 million.

Question

Quizplus · Accepted Answer

The static-budget variance compares the actual results to the original budget (master budget). Since the actual operating profit ($7 million) is $3 million less than the planned operating profit ($10 million), the variance is $3 million unfavourable.

Regier Company Had Planned for Operating Profit of $10 Million