Answered: Q38 A company's master budget for…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 20E: Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc.,...

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Question

Q38

A company's master budget for October is to manufacture and sell 31,300 units, for a total sales revenue of $296,000, total variable costs of $161,410, and total fixed costs of $26,600. The company actually manufactured and sold 33,300 units, and generated $86,600 of operating income in October.

The total flexible-budget variance in October was: (Do not round intermediate calculations.)

Multiple Choice

$6,825 unfavorable.
$51,175 unfavorable.
$29,990 unfavorable.
$8,600 unfavorable.
$60,000 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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