The Static Budget,at the Beginning of the Month,for Keats Company

question 116

Multiple Choice

The static budget,at the beginning of the month,for Keats Company follows: Static budget:
Sales volume: 2,000 units; Sales price: $51.00 per unit
Variable costs: $12.50 per unit; Fixed costs: $26,500 per month
Operating income: $50,500
Actual results,at the end of the month,follows:
Actual results:
Sales volume: 1,950 units; Sales price: $60.00 per unit
Variable costs: $16.00 per unit; Fixed cost: $38,000 per month
Operating income: $47,800
Calculate the sales volume variance for operating income.

• A) $775 U
• B) $50 F
• C) $1,925 U
• D) $1,925 F

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Definitions:

Maturity Date

The specified date on a financial instrument such as a bond or loan when the principal amount is due to be paid back in full.

Note Receivable

A financial asset representing a promise for future receipt of cash, often from loans or credit extended to others.

Factor

An element or condition that actively contributes to the production of a result, often used in the context of mathematics or economic analysis.

Accounts Receivable

The amount of money owed to a company by its customers for goods or services that have been delivered but not yet paid for.