Question

Compute the variances in dollar amount and in percentage. (Round to the nearest whole percent.) Indicate whether the variance is favorable (F) or unfavorable (U). Budgeted Income Amount $500.00 Actual Amount $400.00 Dollar Variance $ Percent Variance % F or U

Answer 1

Answer:

The dollar variance is -$100.

The percent variance is -20%.

Since the actual income is less than the budgeted income, the variance is unfavorable (U).

We calculate Dollar Variance as : $Actual Amount - Budgeted Income$

$Dollar Variance = 400 - 500 = 100$

Next, we calculate percent variance as :

$Percent variance = \frac{Dollar Variance}{Budgeted Income} *100$

Plugging the values in we get,

$Percent Variance = \frac{-100}{500} *100$

Percent Variance = -20%