If the sales budget variance for operating income is $68000 and the static budget amount is $19000, then flexible budget amount will be ____________?
Correct answer: C. $87,000
- A. $47,000
- B. $57,000
- C. $87,000
- D. $97,000
Explanation
The flexible budget amount is obtained by adding the sales volume variance to the static budget amount: $68,000 + $19,000 = $87,000. Thus, the flexible budget reflects the activity level actually achieved.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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