Onyx Company Has Prepared a Static Budget at the Beginning

question 50

Multiple Choice

Onyx Company has prepared a static budget at the beginning of the month. At the end of the month, the following information has been retrieved from the records. 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
Calculate the flexible budget variance for fixed expenses.

• A)$4,500 U
• B)$4,500 F
• C)$0
• D)$5,490 F

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Definitions:

Express Voluntary Assumption

The clear and intentional taking on of a risk or responsibility by an individual, fully understanding its implications.

Strict Liability

Legal responsibility for damages or injury, even if the person found strictly liable was not at fault or negligent.

Defendant's Liability

Refers to the obligation of a defendant in a legal case to compensate for loss or damage as determined by a court.

Reasonable Person Standard

A legal principle used to judge an individual's actions based on what a typical or reasonable person would do in similar circumstances.