The exhibit below reflects a summary of performance for a single item of a retail store's inventory
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Question:
The exhibit below reflects a summary of performance for a single item of a retail store's inventory for the month ended April 30: (CIA adapted)
Actual Results | Flexible Budget Variances | Flexible Budget | Static (Master) Budget | |||||||||||||||
Sales (units) | 12,000 | — | 12,000 | 13,000 | ||||||||||||||
Revenue (sales) | $ | 218,000 | $ | 22,000 | U | $ | 240,000 | $ | 270,000 | |||||||||
Variable costs | 126,000 | 9,000 | U | 117,000 | 130,000 | |||||||||||||
Contribution margin | $ | 92,000 | $ | 31,000 | U | $ | 123,000 | $ | 140,000 | |||||||||
Fixed costs | 78,000 | — | 78,000 | 77,000 | ||||||||||||||
Operating Income | $ | 14,000 | $ | 31,000 | U | $ | 45,000 | $ | 63,000 | |||||||||
The sales volume variance is:
$30,000 favorable.
$30,000 unfavorable.
$9,000 favorable.
$22,000 unfavorable
Related Book For
Cost Management Measuring, Monitoring and Motivating Performance
ISBN: 978-1119185697
3rd Canadian edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang-Hsuan Chen, Gail Cook
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