Onyx Décor Company Has Prepared a Static Budget at the Beginning

question 40

Multiple Choice

Onyx Décor 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 Sales Revenue.

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

Compute the expected contribution margin given a specific activity level.

Understand the cost formula for both variable and fixed expenses.

Determine net operating income using the contribution approach.

Analyze and calculate average fixed costs per unit at a defined activity level.

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Definitions:

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