The Static Budget,at the Beginning of the Month,for Beacon Banner

question 68

Multiple Choice

The static budget,at the beginning of the month,for Beacon Banner Company follows: Static budget:
Sales volume: 1100 units; Sales price: $70.00 per unit
Variable costs: $33.00 per unit; Fixed costs: $37,800 per month
Operating income: $2900
Actual results,at the end of the month,follows:
Actual results:
Sales volume: 995 units; Sales price: $75.00 per unit
Variable costs: $35.00 per unit; Fixed costs: $35,000 per month
Operating income: $4800
Calculate the sales volume variance for revenue.

• A) $2800 U
• B) $7350 U
• C) $3885 U
• D) $4975 F

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Definitions:

Deductible Interest

Interest payments on loans (such as mortgage or student loans) that can be subtracted from gross income to reduce taxable income under certain circumstances.

Home Mortgage

A loan provided by a financial institution to a borrower for the purchase of a residential property, secured by the property itself.

Tax-Exempt Securities

Investments whose interest income is not subject to federal income tax, and in some cases, state and local taxes.

Residence Acquisition Debt

Mortgage debt incurred in acquiring, constructing, or substantially improving a principal residence, which is secured by the residence.