The following information was drawn from the accounting records of Ashton Compan
ID: 2449761 • Letter: T
Question
The following information was drawn from the accounting records of Ashton Company.
Budgeted
Actual
Sales
$ 5,000
$ 6,000
Cost of Goods Sold
(3,000)
(3,600)
Gross Margin
2,000
2,400
Variable Cost
(1,000)
(1,200)
Fixed Cost
(500)
(400)
Net Income
$ 500
$ 800
Based on this information Ashton Company has a
a. $200 favorable variable operating cost variance
b. $200 unfavorable variable operating cost variance
c. $100 favorable variable operating cost variance
d. $100 unfavorable variable operating cost variance
The following information was drawn from the accounting records of Ashton Company.
Explanation / Answer
b. $200 unfavorable variable operating cost variance Cost variance is the difference between Standard Cost and Actual cost Standard Variable Cost 1,000.00 Actual Variable Cost 1,200.00 variable operating cost variance= Std Cost - Actual cost variable operating cost variance= 1000-1200 variable operating cost variance= 200 Unfavourable Note: We have assumed that Budgeted and standard data are same in absence of other information
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