The static budget, at the beginning of the month, for Redwyne Company follows: S

Question

The static budget, at the beginning of the month, for Redwyne Company follows: Static budget: Sales volume: 2.000 units: Sales price: $50 per unit Variable costs: $14 per unit: Fixed costs: $25,500 per month Operating income: $46,500 Actual results, at the end of the month, follows: Actual results: Sales volume: 1.800 units: Sales price: $59.00 per unit Variable costs: $16.50 per unit: Fixed costs: $34,000 per month Operating income: $42,500 Calculate the flexible budget variance for variable costs. $4,500 U $3,200 U $25,200 F $29,700 U

Explanation / Answer

The flexible budget variance for variable costs=($14-$16.50)*1,800=$4,500 U

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