9. Manor Inc. compares monthly operating results to a static budget prepared at

Question

9. Manor Inc. compares monthly operating results to a static budget prepared at the beginning of the month. When the actual level of activity is less than budgeted, which of the following would be true? A. Variable costs B. Variable costs would show unfavorable variances C. Fixed costs would show favorable variances. d show favorable variances. D. Fixed costs would show unfavorable variances 10. Budget Hotel bases its budgets on guest-days. The hotel's static budget for December appears below: 6,800 Budgeted number of guest-days Budgeted variable overhead costs: Supplies (@$7.90 per guest-day) Laundry (@$5.10 per guest-day).... $ 53,720 34.680 88 400 fixed overhead costs: and salaries. upancy costs fixed overhead cost 72.760 44 880 117,640 otal budgeted overhead cost... 2

Explanation / Answer

Solution:(9): Option(A) is correct.

When the actual level of activity is less than budgeted then variable costs would show favorable variances.

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