The Following Data Are for Pablo Corporation The Flexible Budget Variance for Operating Income Is ________

question 143

Multiple Choice

The following data are for Pablo Corporation:
$\begin{array} { l }&&&\text { Flexible Budget for}\\&\text { Actual }&\text { Static Budget }&\text { Actual Sales activity }\\\text { Units }&18,000&16,000&18,000\\\text { Sales }&\$360,000&\$320,000&\$360,000\\ \text {Variable costs }&234,000&192,000&216,000\\\text { Contribution margin }&\$126,000&\$128,000&\$144,000\\\text { Fixed costs }&76,000&80,000&80,000\\\text { Operating income }&\$50,000&\$48,000&\$64,000\end{array}$

The flexible budget variance for operating income is ________.

• A) $2,000 Favorable
• B) $2,000 Unfavorable
• C) $14,000 Favorable
• D) $14,000 Unfavorable

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Definitions:

Gradient

A rate of inclination or slope, or the rate at which a physical quantity changes with respect to change in another quantity.

Cross-sectional Area

The area of a particular section of an object or material that is exposed when it is cut through by a plane.

Deposition

The geological process by which sediments, soil, and rocks are added to a landform or landmass, often carried by wind, water, or ice.

Cutbank

A steep cut or slope formed by lateral erosion of a stream, especially on the outside bend of a channel.