Val's travel budget for October was $720, based on her plan to drive 3,000 miles at a cost of $0.24 per mile. During October, she actually drove 2,800 miles at a total cost of $700. A flexed budget performance report would show a variance of:

Question

Quizplus · Accepted Answer

The formula for flexed budget is as follows:

Flexed budget = (Actual quantity * Budgeted price)

Using this formula, we can calculate Val's expected cost for the actual amount of miles driven:

Flexed budget = (2,800 * $0.24) = $672

The difference between the flexed budget and the actual cost is:

$700 - $672 = $28 higher than expected (unfavorable variance)

Therefore, the answer is C, $28 U (unfavorable).

Val's Travel Budget for October Was $720, Based on Her