Thai Connection Ltd Is a Travel Agency

question 2

Multiple Choice

Thai Connection Ltd is a travel agency. They budget monthly costs of $50,000 plus $125 per customer served. They plan to serve 550 customers per month. During June they served 580 customers. Actual costs for June were $53,000 fixed costs and $65,000 variable costs. The flexible budget variance for variable costs in June is:

• A) $3,750 favourable
• B) $7,500 unfavourable
• C) $3,750 unfavourable
• D) $7,500 favourable

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Definitions:

Import/Export

The business of trading goods and services across international borders, involving the shipment of products from a country of origin (export) and bringing in goods from abroad (import).

Licensing

The process of leasing a legally protected entity (such as a trademark, patent, or technology) for the purpose of generating revenue.

High Cost Reductions

Strategic measures aimed at significantly lowering the expenses incurred by a business or organization.

Transnational Strategy

A multinational corporation’s approach that combines global integration with local responsiveness.