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Sales (units) = 120,000 (budget), 100,000 (flexed budget), 100,000 (actual)
Sales revenue = 1,200,000 (budget), 1,000,000 (flexed), 995,000 (actual)
Variable printing cost = 360,000 (budget) 300,000 (flex) 280,000 (actual)
Variable proudction overheads = 60,000 (budget) 50,000 (flex), 56,000 (actual)
Fixed production cost = 300,000 (budget), 300,000 (flex), 290,000 (actual)
Fixed admin costs = 360,000 (budget), 360,000 (flex), 364,000 (actual)Profit/ Loss = 120,000 (budget), (10,000) (flex), 5000 (actual)
Answer is $15,000(F) Expenditure Variance and $130,000(A) Volume Variance
Can you please explain why that is the answer? Sorry for the presentation of the question, as it was in a table in the exam kit. (Question 293 Kaplan Exam Kit.)
The volume variance is the difference between the flexed budget and the original budget.
The difference between a budget profit of 120,000 and a flexed profit of (10,000) is 130,000 (adverse).The expenditure variance is the difference between the actual profit and the flexed profit.
The difference between an actual profit of 5,000 and a flexed profit of (10,000) is 15,000 favourable.
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