Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Company XYZ created a static budget with the following information based on sales of 10,000 units: Revenue; $50,000, COGS; $30,000, Operating Expenses, $15,000
Company XYZ created a static budget with the following information based on sales of 10,000 units: Revenue; $50,000, COGS; $30,000, Operating Expenses, $15,000. There are no fixed costs. Actual profit for the period was $6,700 based on actual sales of 13,000 units. Based on a flexible budget, Company XYZ would have:
Select one:
a. a favorable net income variance of $200
b. cannot be calculated
c. a favorable net income variance of $250
d. an unfavorable net income variance of $300
View CommentsFlag Question
Budgeted Profit for 10000 units = Revenue - COGS - Operating Expenses
= $50,000 - $30,000 - $15,000
= $5,000
Budgeted Profit for 13,000 units = $5,000/10,000 Units * 13,000 Units = $6,500
While Actual profit for the period was $6,700.
So, Actual profit is more than budgeted profit by $200.
Hence, There is a favorable net income variance of $200.
So, the correct option is A "a favorable net income variance of $200".
