Pregunta 4

A company sells only product A. The following information is available:

Estimated purchase cost of A: $200/u Budgeted selling and administrative expenses are $200,000 per year The company plans to sell 2,000 units of A. Estimated selling price of A/unit: $500 In reality, the company sells 1,500 units of A at a unit price of $550. The actual Purchase Cost of product A was $210/unit Selling and administrative expenses are equal to those budgeted In this example, there are three sources of variation:

Volume variation (the difference between the static budget and the flexible budget) Variation in sales price of A Change in purchase price of A Which of the following statements is false?

Please select an alternative:

A. The sum of those three variations is 90,000(D)

B. The sale price variation of A is favorable

C. The variance between the flexible budget and the actual result is 60,000(F)

D. The variation in the sale price of A, plus the variation in the purchase price of A is 60,000(D)