The following information was drawn from the accounting records of Smith Company Static Budget Flexible Budget Actual Results Sales $ 13,500 $ 19,000 $ 21,100 Cost of Goods Sold (6,700 ) (8,600 ) (7,250 ) Gross Margin 6,800 10,400 13,850 Variable Cost (2,700 ) (3,450 ) (4,350 ) Fixed Cost (1,700 ) (1,700 ) (2,000 ) Net Income $ 2,400 $ 5,250 $ 7,500 Based on this information the Multiple Choice variable operating cost volume variance is a $1,100 favorable variance. variable operating cost flexible budget variance is a $900 unfavorable variance. variable operating cost volume variance is a $900 favorable variance. variable operating cost flexible budget variance is a $1,100 favorable variance
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The following information was drawn from the accounting records of Smith Company
| Static Budget | Flexible Budget | Actual Results | ||||||||||||||||
| Sales | $ | 13,500 | $ | 19,000 | $ | 21,100 | ||||||||||||
| Cost of Goods Sold | (6,700 | ) | (8,600 | ) | (7,250 | ) | ||||||||||||
| Gross Margin | 6,800 | 10,400 | 13,850 | |||||||||||||||
| Variable Cost | (2,700 | ) | (3,450 | ) | (4,350 | ) | ||||||||||||
| Fixed Cost | (1,700 | ) | (1,700 | ) | (2,000 | ) | ||||||||||||
| Net Income | $ | 2,400 | $ | 5,250 | $ | 7,500 | ||||||||||||
Based on this information the
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variable operating cost volume variance is a $1,100 favorable variance.
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variable operating cost flexible
budget variance is a $900 unfavorable variance. -
variable operating cost volume variance is a $900 favorable variance.
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variable operating cost flexible budget variance is a $1,100 favorable variance.
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