March 11 problems.docx - Banshee Enterprises compares annual operating results to a static budget prepared at the beginning of the year When the actual

# March 11 problems.docx - Banshee Enterprises compares...

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Banshee Enterprises compares annual operating results to a static budget prepared at the beginning of the year. When the actual level of activity is greater than budgeted, which of the following would typically be true? (exam will have similar q to this) a0. Fixed costs would show unfavorable variances. b0. Fixed costs would show favorable variances. c. Variable costs would show unfavorable variances. d0. Variable costs would show favorable variances. e0. None than one of the above. C. Variable costs scale higher with more activity actual var costs will be higher than budgeted var costs due to the activity itself and this is an unfavorable variance. Fixed costs won’t show much, if any, variance (non-activity factors). Var costs won’t become favorable (go down) with more activity either. Olive’s Framing Store formula for its supplies cost is \$2,000 fixed cost per month plus \$15 variable cost per frame. For April, the company planned for activity of 900 frames, but the actual level of activity was 860 frames. The actual supplies cost for the month was \$14,000. What percentage of the variance between the static budget and actual results was