Daniels corporation used the following data to

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Chapter 3 / Exercise 3-29
Accounting Using Excel for Success
Reeve/Warren
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13) Daniels Corporation used the following data to evaluate their current operating system. The company sells items for $19 each and had used a budgeted selling price of $20 per unit. Actual Budgeted Units sold 280,000 units 270,000 units Variable costs $990,000 $887,000 Fixed costs $60,000 $47,000 What is the static-budget variance of variable costs? A) $116,000 favorable B) $116,000 unfavorable C) $103,000 favorable D) $103,000 unfavorable Answer: Explanation: Static-budget variance of variable costs = $990,000 − $887,000 = $103,000 U D Diff: 2
Objective: 1 AACSB: Application of knowledge
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Accounting Using Excel for Success
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Chapter 3 / Exercise 3-29
Accounting Using Excel for Success
Reeve/Warren
Expert Verified
14) Daniels Corporation used the following data to evaluate their current operating system. The company sells items for $18 each and had used a budgeted selling price of $19 per unit. Actual Budgeted Units sold 280,000 units 278,000 units Variable costs $960,000 $886,000 Fixed costs $60,000 $51,000 What is the static-budget variance of operating income? B U Diff: 3
Objective: 1 AACSB: Application of knowledge 15) Johnson Company had planned for operating income of $10 million in the master budget with a contribution margin of $3 million, but actually achieved operating income of only $7 million and a contribution margin of $2.5 million. B
Diff: 2 Objective: 1 AACSB: Analytical thinking 16) A master budget is called a static budget because it is developed around a single planned output level. Diff: 1
Objective: 1 AACSB: Analytical thinking
17) For revenue items, a favorable variance means that actual revenues are less than expected.
Diff: 2 Objective: 1 AACSB: Application of knowledge 18) A variance is the difference between the actual cost for the current and expected (or budgeted) performance.
Diff: 2 Objective: 1 AACSB: Analytical thinking 19) A favorable expense variance results when actual costs exceed budgeted costs. Diff: 2
Objective: 1 AACSB: Analytical thinking

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