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:

Labour Standards

Regulations and practices that aim to ensure fair treatment, safety, and well-being of workers in the workplace.

Allowances

Financial or other concessions granted to employees, customers, or other stakeholders, typically for specific purposes or as adjustments under certain conditions.

Normal Time

The average time taken by a worker to complete a task under normal working conditions.

Standard Time

The established duration designed for the completion of a specific task, under normal working conditions and performance.