The Static Budget,at the Beginning of the Month,for Vintage Wine

question 86

Multiple Choice

The static budget,at the beginning of the month,for Vintage Wine Company follows: Static budget:
Sales volume: 2000 units; Sales price: $50.00 per unit
Variable costs: $13.00 per unit; Fixed costs: $25,500 per month
Operating income: $48,500
Actual results,at the end of the month,follows:
Actual results:
Sales volume: 1900 units; Sales price: $58.50 per unit
Variable costs: $16.00 per unit; Fixed costs: $34,300 per month
Operating income: $46,450
Calculate the flexible budget variance for variable costs.

• A) $30,400 U
• B) $1650 U
• C) $5700 U
• D) $24,700 F

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Definitions:

Performance Goals

Targets set to measure the efficiency, productivity, or success of an individual or organization’s activities.

Control Operations

This refers to the various procedures and mechanisms deployed by a business or organization to regulate and guide its operations towards achieving set objectives.

Variance

The difference between planned or budgeted figures and actual figures, used in performance analysis and management.

Financial Reporting Systems

Systems used by organizations to manage and process financial data, and to produce reports that accurately depict business performance and financial position.