The following information was drawn from the accounting records of Smith Company Static Budget Flexible Budget Actual Results Sales $11,000 $14,000 $15,100 Cost of Goods Sold (6,200) (7,600) (7,000) Gross Margin 4,800 6,400 8,100 Variable Cost (2,200) (2,700) (1,200) (3,100) Fixed Cost (1,200) $ 1,400 (1,500) $ 3,500 Net Income $ 2,500 Based on this information the Multiple Choice sales price flexible budget variance is a $4,100 unfavorable variance. sales price flexible budget variance is a $1,100 favorable variance. sales price flexible budget variance is a $4,100 favorable variance.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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4th option: sales price flexible budget variance is a $3,000 favorable variance.
The following information was drawn from the accounting records of Smith Company:

|                             | Static Budget | Flexible Budget | Actual Results |
|-----------------------------|---------------|-----------------|----------------|
| **Sales**                   | $11,000       | $14,000         | $15,100        |
| **Cost of Goods Sold**      | (6,200)       | (7,600)         | (7,000)        |
| **Gross Margin**            | 4,800         | 6,400           | 8,100          |
| **Variable Cost**           | (2,200)       | (2,700)         | (3,100)        |
| **Fixed Cost**              | (1,200)       | (1,200)         | (1,500)        |
| **Net Income**              | $1,400        | $2,500          | $3,500         |

**Based on this information, the question is:**

Multiple Choice

- [ ] Sales price flexible budget variance is a $4,100 unfavorable variance.
- [ ] Sales price flexible budget variance is a $1,100 favorable variance.
- [ ] Sales price flexible budget variance is a $4,100 favorable variance.
Transcribed Image Text:The following information was drawn from the accounting records of Smith Company: | | Static Budget | Flexible Budget | Actual Results | |-----------------------------|---------------|-----------------|----------------| | **Sales** | $11,000 | $14,000 | $15,100 | | **Cost of Goods Sold** | (6,200) | (7,600) | (7,000) | | **Gross Margin** | 4,800 | 6,400 | 8,100 | | **Variable Cost** | (2,200) | (2,700) | (3,100) | | **Fixed Cost** | (1,200) | (1,200) | (1,500) | | **Net Income** | $1,400 | $2,500 | $3,500 | **Based on this information, the question is:** Multiple Choice - [ ] Sales price flexible budget variance is a $4,100 unfavorable variance. - [ ] Sales price flexible budget variance is a $1,100 favorable variance. - [ ] Sales price flexible budget variance is a $4,100 favorable variance.
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