The actual information pertains to the third quarter. As part of the budgeting process, the Duck Decoy Department of Paralith Incorporated had developed the following static budget for the third quarter. Duck Decoy is in the process of preparing the flexible budget and understanding the results. Actual Flexible Static Results Budget Budget Sales volume (in units) 15,000 11,000 Sales revenues $245,000 $235,000 Variable costs 139,000 184,000 Contribution margin 106,000 51,000 Fixed costs 42,000 31,000 Operating profit $64,000 $20,000 The flexible budget will report ________ for variable costs. A) $101,933 B) $250,909 C) $45,000 D) $184,000 The flexible budget will report ________ for fixed costs. A) $31,000 B) $36,500 C) $42,000 D) $42,273 The flexible budget variance for contribution margin is___________. A) $0 B) $36,455 U C) $55,000 U D) $78,500 U The sales-volume variance for fixed costs is____________. A) $0 B) $5,500 U C) $11,000 U D) $11,273 U

The actual information pertains to the third quarter. As part of the budgeting process, the Duck Decoy Department of Paralith Incorporated had developed the following static budget for the third quarter. Duck Decoy is in the process of preparing the flexible budget and understanding the results. Actual Flexible Static Results Budget Budget Sales volume (in units) 15,000 11,000 Sales revenues $245,000 $235,000 Variable costs 139,000 184,000 Contribution margin 106,000 51,000 Fixed costs 42,000 31,000 Operating profit $64,000 $20,000 The flexible budget will report __ for variable costs. A) $101,933 B) $250,909 C) $45,000 D) $184,000 The flexible budget will report for fixed costs. A) $31,000 B) $36,500 C) $42,000 D) $42,273 The flexible budget variance for contribution margin is_. A) $0 B) $36,455 U C) $55,000 U D) $78,500 U The sales-volume variance for fixed costs is________. A) $0 B) $5,500 U C) $11,000 U D) $11,273 U

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Actual

Flexible

Static

Results

Budget

Sales volume (in units)

15,000

11,000

Sales revenues

$245,000

$235,000

Variable costs

139,000

184,000

Contribution margin

106,000

51,000

Fixed costs

42,000

31,000

Operating profit

$64,000

$20,000

The flexible budget will report ________ for variable costs.

A) $101,933

B) $250,909

C) $45,000

D) $184,000

The flexible budget will report ________ for fixed costs.

A) $31,000

B) $36,500

C) $42,000

D) $42,273

The flexible budget variance for contribution margin is___________.

A) $0

B) $36,455 U

C) $55,000 U

D) $78,500 U

The sales-volume variance for fixed costs is____________.

A) $0

B) $5,500 U

C) $11,000 U

D) $11,273 U

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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