The Static Budget,at the Beginning of the Month,for Redwyne Company $\$ 50.00$

question 189

Multiple Choice

The static budget,at the beginning of the month,for Redwyne Company follows: Static budget:
Sales volume: 2,000 units; Sales price: $\$ 50.00$ per unit
Variable costs: $\$ 14.00$ per unit; Fixed costs: $\$ 25,000$ per month
Operating income: $\$ 47,000$


Actual results, at the end of the month, follows:
Actual results:
Sales volume: 1,900 units; Sales price: $\$ 58.50$ per unit
Variable costs: $\$ 16.00$ per unit; Fixed costs: $\$ 33,000$ per month
Operating income: $\$ 47,750$
Calculate the flexible budget variance for variable costs.

• A)$30,400 U
• B)$4,350 U
• C)$3,800 U
• D)$26,600 F

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Definitions:

Interest Receivable

An accounting term representing the interest income that has been earned but not yet received in cash.

Adjusting Entry

A financial document alteration that ensures accounting records and statements reflect accurate and real numbers, applied before the financial statements' finalization.

Revenue Recognition

The accounting principle that determines the specific conditions under which revenue is recognized or accounted for.

Expense Recognition (Matching)

A principle of accrual accounting that matches expenses with revenues in the period in which they are incurred to generate those revenues, ensuring accurate financial reporting.