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:

Dollar Variance is -$100

Percent Variance is -20%

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

We calculate Dollar Variance as $Actual Income - Budgeted Income$.

$Dollar Variance = 400 - 500 = -100$

Next calculate percent variance as $\frac{Dollar Variance}{Budgeted Income}*100$

$Percent Variance = \frac{-100}{500} * 100 = -0.20*100$

Percentage Variance = -20%.