The Following Data Are for Newhart Corporation The Total of the Master Budget Variances Is _____

question 57

Multiple Choice

The following data are for Newhart Corporation: $\begin{array}{ccc} && & \text { Flexible } \\&& & \text { Budget for } \\&& \text { Static } & \text { Actual Sales } \\&\text { Actual } &\text { Budget } & \text { Activity }\\\hline \text { Units } & 18,000 & 16,000 & 18,000 \\\text { Sales } & \$ 360,000 & \$ 320,000 & \$ 360,000 \\\text { Variable costs } & 234,000 & 192,000 & 216,000 \\\text { Contribution margin } & \$ 126,000 & \$ 128,000 & \$ 144,000 \\\text { Fixed costs } & 76,000 & 80,000 & 80,000 \\\text { Operating income } & \$ 50,000 & \$ 48,000 & \$ 64,000 \\\end{array}$ The total of the master budget variances is _____.

• A)$16,000 favorable
• B)$16,000 unfavorable
• C)$2,000 unfavorable
• D)$2,000 favorable

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Definitions:

EIC Formula

The calculation method used to determine the Earned Income Credit, a refundable tax credit for low to moderate-income working individuals and families.

Earned Income

Income derived from active participation in a business, including wages, salaries, tips, and net earnings from self-employment.

Elderly or Disabled

Elderly or Disabled refers to tax terms that qualify individuals for certain tax deductions or credits based on their age, typically over 65, or if they have a qualifying permanent disability.

Base Amount

Refers to a reference value used in calculations, often determining thresholds or limits in tax and financial contexts.