Schooner Corporation used the following data to evaluate its current operating system. The company sells items for $23 each and used a budgeted selling price of $23 per unit. ActualBudgetedUnits sold171,000 units187,000 unitsVariable costs$1,081,000$1,285,000Fixed costs$800,000$774,000 What is the static-budget variance of revenues? A.$16,000 favorable B.$368,000 favorable C.$368,000 unfavorable D.$16,000 unfavorable

Name: Schooner Corporation used the following data to evaluate its current o
Uploaded: 2024-03-20T06:33:06.000Z
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Description: Schooner Corporation used the following data to evaluate its current operating system. The company sells items for $23 each and used a budgeted selling price of $23 per unit. ActualBudgetedUnits sold171,000 units187,000 unitsVariable costs$1,08

Solution: Actual revenues = Actual units * actual selling price = 171000 *23 = 3,933,000 Budgeted revenues = Budgeted units * Budgeted selling price = 187000 *23 = 4,301,000 Static-budget variance of revenues = Actual revenues - Budgeted revenues = 3933000 - 4301000 = $368,000 Unfavorable Hence option "C" is correct.

Answered: hooner Corporation used the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Schooner Corporation used the following data to evaluate its current operating system. The company sells items for $23 each and used a budgeted selling price of $23 per unit.

	Actual	Budgeted
Units sold	171,000 units	187,000 units
Variable costs	$1,081,000	$1,285,000
Fixed costs	$800,000	$774,000

What is the static-budget variance of revenues?

$16,000 favorable

$368,000 favorable

$368,000 unfavorable

$16,000 unfavorable

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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