The following information was drawn from the accounting records of Smith Company

	Static Budget						Flexible Budget						Actual Results
Sales		$	17,500					$	27,000					$	30,700
Cost of Goods Sold			(7,500	)					(10,200	)					(7,650	)
Gross Margin			10,000						16,800						23,050
Variable Cost			(3,500	)					(4,650	)					(6,350	)
Fixed Cost			(2,500	)					(2,500	)					(2,800	)
Net Income		$	4,000					$	9,650					$	13,900

1) Based on this information the

Multiple Choice

• sales price flexible budget variance is a $13,200 unfavorable variance.

• sales price flexible budget variance is a $3,700 favorable variance.

• sales price flexible budget variance is a $13,200 favorable variance.

• sales price flexible budget variance is a $9,500 favorable variance.

2) Based on this information the

Multiple Choice

• cost of goods sold flexible budget variance is a $1,800 unfavorable variance.

• cost of goods sold volume variance is a $1,800 favorable variance.

• cost of goods sold flexible budget variance is a $2,700 favorable variance.

• cost of goods sold volume variance is a $2,700 unfavorable variance.