Question

Below is data for Jewelry by Jessica for the month of October.

	Master Budget	Flexible Budget	Actual Results
Revenue	$60,000	$64,000	$76,800
Variable costs	$24,000	$38,400	$44,800
Contribution margin	$36,000	$25,600	$32,000
Fixed costs	$5,000	$5,000	$7,500
Profit before taxes	$31,000	$20,600	$24,500

What statement below is true?

Group of answer choices

Fixed costs spending variance is $2,500 U and the sales price variance is $10,400 F

Sales volume variance is $10,400 U and the variable cost spending variance is $6,400U

Profit variance is $13,500 F and the sales price variance is $12,800 U

Sales volume variance is $9,600 F and the sales price variance is $12,800 F

Profit variance is $3,900 U and the sales volume variance is $6,500 F

Sales volume variance is $12,800 F and the sales price variance is $9,600 U

Answer 1

Variances

	Master Budget	Activity variance	Flexible Budget	Flexible budget variance	Actual Results
Revenue	$60,000	4000 F	$64,000	12800 F	$76,800
Variable costs	$24,000	14400 U	$38,400	6400 U	$44,800
Contribution margin	$36,000	10400 U	$25,600	6400 F	$32,000
Fixed costs	$5,000	0 None	$5,000	2500 U	$7,500
Profit before taxes	$31,000	10400 U	$20,600	3900 F	$24,500

So answer is b) Sales volume variance is $10,400 U and the variable cost spending variance is $6,400U

answered by: anonymous