At the end of 20x1, SWP Corporation prepared its master budget for 20x2. Selected amounts from that budget, along with actual results for 20x2, are presented below: Budgeted Actual
Sales $180,000 $210,000
Research and development cost 25,000 20,000
Interest revenue 7,600 7,000
Cost of goods sold 60,000 65,000
Marketing costs 45,000 45,000
SWP's total budget variance for the data provided is:
A)$29,400 favourable
B)$29,400 unfavourable
C)$40,600 favourable
D)$40,600 unfavourable

Question

Quizplus · Accepted Answer

The total budget variance is calculated by comparing the actual results to the budgeted amounts. The variance for each item is: Sales: $30,000 favourable, R&D: $5,000 favourable, Interest Revenue: $600 unfavourable, COGS: $5,000 unfavourable, Marketing Costs: $0. The net variance is $30,000 - $5,000 - $600 = $24,400 favourable.

At the End of 20x1, SWP Corporation Prepared Its Master