The Following Data Are for Quick Draw Corporation: Flexible Budget

question 81

Multiple Choice

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

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

---

Definitions:

Price

The amount of money required to purchase a good or service, determined by factors such as supply, demand, and production costs.

Trade

The exchange of goods and services between individuals or entities, either within the same country or internationally.

Budget Line

A graphical representation showing all possible combinations of two goods that can be purchased given a consumer's income and the prices of the goods.

Price

The sum of money anticipated, needed, or provided as payment for an item.