Corrao Company Had a Static Budgeted Operating Income of $8

question 31

Multiple Choice

Corrao Company had a static budgeted operating income of $8.6 million.Actual operating income was $6.4 million.The flexible budget operating income at the actual level of output is $7,000,000.What is the static-budget variance of operating income?

• A) $1.6 million Favorable
• B) $1.6 million Unfavorable
• C) $2.2 million Favorable
• D) $2.2 million Unfavorable

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency of an investment or compare the efficiency of multiple investments.

Unit Sales

The volume of product units sold by a company in a specific period.

Full Cost

The total cost of manufacturing and delivering a product or service, including direct and indirect costs.

Opportunity Costs

The potential benefits lost when one alternative is chosen over another.