Static and Flexible Budgets Graham Corporation used the following data to evalua

Question

Static and Flexible Budgets
Graham Corporation used the following data to evaluate its current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit.

a. Prepare the actual income statement, flexible budget, and static budget.

Do not use negative signs with any of your answers below.

For questions b., c., and d., do not use negative signs with your answers. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.

b. What is the static-budget variance of revenues?

$Answer AnswerFU

c. What is the flexible budget variance for variable costs?

$Answer AnswerFU

d. What is the flexible budget variance for fixed costs?

$Answer AnswerFU

Actual Budgeted Units sold 685,000 700,000 Variable costs 1,850,000 2,100,000 Fixed costs 1,525,000 1,485,000

Explanation / Answer

b...

(685000 * 10) - (700000 * 10) = 150000 U

c...

1850000 - 2100000 = 250000 F

d..

1525000 - 1485000 = 40000 U

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