The Static Budget,at the Beginning of the Month,for Amira Company

question 190

Multiple Choice

The static budget,at the beginning of the month,for Amira Company follows: Static budget:
Sales volume: 1000 units; Sales price: $70.00 per unit
Variable costs: $32.00 per unit; Fixed costs: $36,800 per month
Operating income: $1200
Actual results,at the end of the month,follows:
Actual results:
Sales volume: 980 units; Sales price: $74.00 per unit
Variable costs: $35.00 per unit; Fixed costs: $34,600 per month
Operating income: $3620
Calculate the flexible budget variance for fixed costs.

• A) $2200 U
• B) $2200 F
• C) $0
• D) $3180 F

---

Definitions:

Income Tax Withholdings

Taxes an employer deducts from employees' wages and pays directly to the government as a part of employees' income tax obligations.

IRS

The Internal Revenue Service, a U.S. government agency responsible for the collection of taxes and enforcement of tax laws.

Estimated Payments

Estimated Payments are periodic prepayments of taxes on income that is not subject to withholding, such as self-employment income, interest, and dividends.

Subject to Withholding

Income that is subject to tax withholding by the payer, which includes wages, certain types of gambling winnings, and other payments.