The fixed budget indicates a sales of $50,000. Actual sales were $55,000. The variance is:

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $9.99Unlock all

Study for the Accounting Test. Prepare with flashcards and multiple-choice questions, each question includes hints and explanations. Get ready for your exam!

Multiple Choice

The fixed budget indicates a sales of $50,000. Actual sales were $55,000. The variance is:

Explanation:
Variance compares what actually happened to what was planned. Here, the fixed budget planned sales of 50,000, while actual sales were 55,000. The difference is 5,000 in favor of the plan, so this is a favorable variance. The amount is 5,000 because actual is higher than budget. If actual sales had been lower, it would be unfavorable; If it were the same, there would be no variance.

Variance compares what actually happened to what was planned. Here, the fixed budget planned sales of 50,000, while actual sales were 55,000. The difference is 5,000 in favor of the plan, so this is a favorable variance. The amount is 5,000 because actual is higher than budget. If actual sales had been lower, it would be unfavorable; If it were the same, there would be no variance.

More Multiple Choice Questions
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy