Answer:
Since the actual expenses is lower than the budgeted expenses, and the variance is positive, a report prepared for the manager of this profit center would show a favorable variance.
Explanation:
Revenue variance is the difference between the actual sales volume and the budgeted sales volume.
Revenue variance = Actual sales - Budgeted sales
Budgeted sales = $950000
Actual sales = $900000
Revenue variance = $900000 - $950000
= - $50000
Since the actual sales is lower than the budgeted sales, and the variance is negative, so the variance is unfavorable.
Cost variance is the difference between the budgeted expenses and the actual expenses.
Cost variance = Budgeted expenses - Actual expenses
Budgeted expenses = $600000
Actual expenses = $550000
Cost variance = $600000 - $550000
= $50000
Since the actual expenses is lower than the budgeted expenses, and the variance is positive, so the variance is favorable.
Therefore, Since the actual expenses is lower than the budgeted expenses, and the variance is positive, a report prepared for the manager of this profit center would show a favorable variance.
