A company has performed the following analysis for its operations PROFIT VARIANC

Question

A company has performed the following analysis for its operations PROFIT VARIANCE ANALYSIS REPORT Flexible Budget Variance Sales Volume Variance Actual Flexible Master Results Budget Budget Units Sold 20,000 20,000 5,000 U 25,000 Sales 120,000 137,500 Variable Cost 2,000 U 50,000 12,500 F 62,500 Cont. Margin 15,000 U 75,000 Fixed Cost 30,000 5,000 F 35,000 35,000 Operating Income 13,000 F 5,000 U S 40,000 The actual variable costs (B) should be Select one O a. $73,000 b. $54,000 O c. $77,000 O d, $52,000

Explanation / Answer

The actual variable costs (B) should be:

d. $ 52,000

$50,000(Flexible Budget) + $2,000 U(Flexible Budget Variance) = $ 52,000.

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