If budgeted sales revenue is $250 000 and actual sales revenue is $230 000, and budgeted expenses are $125 000 and actual expenses are $142 000, the profit variance for the period is:

Question

Quizplus · Accepted Answer

Profit variance = Actual profit - Budgeted profit 
Budgeted profit = Budgeted revenue - Budgeted expenses 
= $250 000 - $125 000 
= $125 000 
Actual profit = Actual revenue - Actual expenses 
= $230 000 - $142 000 
= $88 000 
Profit variance = $88 000 - $125 000 
= $37 000 U (unfavorable because actual profit is less than budgeted profit)

If Budgeted Sales Revenue Is $250 000 and Actual Sales