Onyx Company Prepared a Static Budget at the Beginning of the Month

question 34

Multiple Choice

Onyx Company prepared a static budget at the beginning of the month. At the end of the month, the company is analyzing actual results versus budget using flexible budget methodology. Data are as follows:
Static budget: Sales volume: 1,000 units Price: $70 per unit
Variable expense: $32 per unit Fixed expenses: $37,500 per month
Operating income: $500
Actual results: Sales volume: 990 units Price: $74 per unit
Variable expense: $35 per unit Fixed expenses: $33,000 per month
Operating income: $5,610
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Based on the above data, how much was the flexible budget variance for variable expenses?

• A) $5,490 U
• B) $2,970 U
• C) $2,970 F
• D) $3,960 F

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Definitions:

Reality Principle

A concept from psychoanalytic theory referring to the capacity of the mind to assess the external world and act upon it accordingly, often seen as counter to the pleasure principle.

Dialectical Behavioral Therapy

A type of cognitive-behavioral therapy that emphasizes the psychosocial aspects of treatment, focusing on the development of coping skills to manage emotional distress and improve interpersonal relationships.

Maladaptive Behaviors

Actions or tendencies that inhibit an individual's ability to adjust healthily to particular situations.

Disorders

Conditions characterized by disruption of normal functioning in the body or mind, leading to distress or impaired function.