Yesterday Company has the following information: Actual operating loss at 5,000

Question

Yesterday Company has the following information:

Actual operating loss at 5,000 units                                               $(11,000)

Budgeted operating income at 5,000 units                                        $5,000

Budgeted operating income at 10,000 units                                   $12,000

Planned level of operations                                                         10,000 units

Actual level of operations                                                              5,000 units

Assume units of output is the cost driver for product costs. What is the static budget variance for operating income?

A) $11,000 Unfavorable

B) $12,000 Unfavorable

C) $23,000 Unfavorable

D) $23,000 Favorable

Explanation / Answer

B) $12,000 Unfavorable

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