A.C. Catering reported actual operating income for the current year of $40,000. The flexible budget's operating income for actual volume achieved is $38,000, while the static budget's operating income is $35,000. What is the flexible budget variance for operating income?

Question

Quizplus · Accepted Answer

Flexible budget variance is the difference between actual results and the flexible budget. In this case, the flexible budget's operating income for actual volume achieved is $38,000, which is $2,000 higher than the actual operating income of $40,000. Therefore, the flexible budget variance for operating income is $2,000 favourable.

AC Catering Reported Actual Operating Income for the Current Year