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    Flexible Budget

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    ABC Company's flexible budget shows a selling price per unit of $150, variable cost per unit of $90, and fixed costs of $150,000. ABC Company's expected activity level was 6,000 units. What would its flexible budget show as income for 7,000 units? Is the answer a) $210,000 b) $245,000 c) $270,000 d) $360,000 e) None of the above, the answer is $_____

    Assume actual results were 7,000 units sold and $261,000 income what is ABC Company's total flexible budget variance? Is the answer a) $9,000 Unfavorable b) $0 c) $51,000 favorable d) $60,000 favorable e) None of the above, the answer is $_____

    What is ABC Company's total sales activity variance? Is the answer a) $9,000 Unfavorable b) $0 c) $51,000 favorable d) $60,000 favorable e) None of the above, the answer is $____

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    Solution Preview

    Answer: C
    For 7,000 units the flexible budget would show income of 7,000 * ($150 - $90) - $150,000 = ...

    Solution Summary

    This solution calculates the income and variances for a company using a flexible budget.

    $2.19

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