A city paid $40,000 for police cars with the expectation that they would have a useful life of 4 years. After 3 years, the city
1 answer:
You might be interested in
Answer:
Flexible budget variance for Sales Revenue = $3,960 Favorable
Explanation:
Provided budget is static budget, firstly for calculating flexible budget variance for Sales Revenue.
For this flexible budget is made of same level of quantity as of actual level.
therefore Flexible budget sales = 990 units @ $70 per unit price will be same as of static budget.
Therefore Variance = Standard Flexible Budgeted Sales - Actual Sales
Standard Flexible Budgeted Sales = 990 $70 = $69,300
Actual Sales Revenue = 990 $74 = $73,260
Since actual revenue is more than budgeted sales this is favorable.
Flexible Budget Variance for Sales Revenue = $69,300 - $73,260 = $3,960
Since actual revenue is more than budgeted revenue therefore this is a favorable variance.
Flexible budget variance for Sales Revenue = $3,960 Favorable