Onyx Company Has Prepared a Static Budget at the Beginning

question 123

Multiple Choice

Onyx Company has prepared a static budget at the beginning of the month. At the end of the month, following information has been retrieved from the records. Static budget:
Sales volume: 2,000 units: Price: $50 per unit
Variable expense: $12 per unit: Fixed expenses: $25,000 per month
Operating income: $51,000
Actual results:
Sales volume: 1,800 units: Price: $58 per unit
Variable expense: $16 per unit: Fixed expenses: $35,000 per month
Operating income: $40,600
Calculate the flexible budget variance for operating income.

• A)$4,500 U
• B)$7,600 U
• C)$2,800 U
• D)$5,490 F

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Definitions:

Social Desirability Bias

The tendency of survey respondents to answer questions in a manner that will be viewed favorably by others.

Socially Approved

Regarded or accepted by society as being correct, appropriate, or beneficial.

Selfish Manner

Acting with concern for one's own welfare or advantage at the expense of or without regard for others.

Agreeing

The act of sharing the same opinion or position as someone else.