Use the Information Below to Answer the Following Question(s)

question 170

Multiple Choice

Use the information below to answer the following question(s) .Ames Golf Company used the following data to evaluate their current operating system.The company sells 1 pack of golf balls for $10 per pack.The $10 selling price is also the budgeted selling price.
-A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance $10,000 U; revenues variance $400,000 F; contribution margin variance $60,000 F.What is the total static-budget variance?

• A)$50,000 F
• B)$50,000 U
• C)$230,000 F
• D)$230,000 U
• E)$390,000 F

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Definitions:

Fixed Expenses

Costs that do not change in total with variations in the volume of activity, such as rent, salaries, and insurance.

Selling Price

The price at which a product or service is offered to consumers.

Net Operating Income

The revenue from a company's primary business operations minus operating expenses, excluding taxes and interest.

Units Sold

The quantity of product units that have been sold during a specific period.