Question
Almond Company expressed the total expenses (Y) component of its master budget for February with the cost formula Y = $90,000 + $20 * X,
Almond Company expressed the total expenses (Y) component of its master budget for February with the cost formula Y = $90,000 + $20 * X, where X represents the expected number of units of its only product to be manufactured and sold. The budgeted average selling price per unit was $40 for budgeted sales volume 6,000 units. Reported actual results for February were as follows:
Sales | 6,200 units |
Sales revenue | $ 260,000 |
Less variable costs | ($ 125,000) |
Contribution margin | $ 135,000 |
Less fixed costs | ($ 98,000) |
Operating Income | $ 37,000 |
What was the total static budget variance for February?
A. $6,000 Unfavourable
B. $6,500 Unfavourable
C. $7,000 Favourable
D. $7,500 Favourable
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