# 11 general insurance company had a static budgeted operating income of 4 6 million h 4302519

11) General Insurance Company had a static budgeted operating income of \$4.6 million; however, actual income was \$3.0 million. What is the static budget variance of operating income?

A) \$1,000,000 favourable

B) \$1,000,000 unfavourable

C) \$1,600,000 favourable

D) \$3,000,000 favourable

E) \$1,600,000 unfavourable

Use the information below to answer the following question(s).

Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for \$10 per pack. The \$10 selling price is also the budgeted selling price.

 Budgeted Actual Units Sold 1,000,000 990,000 Variable Costs \$3,000,000 \$2,500,000 Fixed Costs \$1,800,000 \$1,850,000

12) What is the actual operating income for Ames Golf Company using the actual results?

A) <\$3,360,000>

B) \$4,750,000

C) \$5,200,000

D) \$5,550,000

E) \$5,970,000

13) What is the budgeted operating income for Ames Golf Company?

A) \$7,000,000

B) \$5,970,000

C) \$5,550,000

D) \$5,200,000

E) \$4,750,000

14) What is the total static budget variance for Ames Golf Company?

A) \$650,000 favourable

B) \$450,000 unfavourable

C) \$400,000 favourable

D) \$390,000 unfavourable

E) \$350,000 favourable

15) A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance \$10,000 U; revenues variance \$400,000 F; contribution margin variance \$60,000 F

Required: What is the total static-budget variance?

A) \$50,000 F

B) \$50,000 U

C) \$230,000 F

D) \$230,000 U

E) \$390,000 F

Answer the following question(s) using the information below.

Abernathy Corporation used the following data to evaluate their current operating system. The company sells items for \$10 each and used a budgeted selling price of \$10 per unit.

 Actual Budgeted Units sold 92,000 units 90,000 units Variable costs \$450,800 \$432,000 Fixed costs \$95,000 \$100,000

16) What is the static-budget variance of revenues?

A) \$20,000 favourable

B) \$20,000 unfavourable

C) \$2,000 favourable

D) \$2,000 unfavourable

E) \$25,000 unfavourable

17) What is the static-budget variance of variable costs?

A) \$1,200 favourable

B) \$18,800 favourable

C) \$20,000 favourable

D) \$1,200 unfavourable

E) \$18,800 unfavourable

18) What is the static-budget variance of operating income?

A) \$3,800 favourable

B) \$1,200 unfavourable

C) \$6,200 favourable

D) \$6,200 unfavourable

E) \$1,200 favourable

Use the information below to answer the following question(s).

Bates Corporation used the following data to evaluate their current operating system. The company sells items for \$10 each and used a budgeted selling price of \$10 per unit.

 Actual Budgeted Units sold 495,000 units 500,000 units Variable costs \$1,250,000 \$1,500,000 Fixed costs \$925,000 \$900,000

19) What is the static-budget variance of revenues?

A) \$50,000 favourable

B) \$50,000 unfavourable

C) \$5,000 favourable

D) \$5,000 unfavourable

E) \$25,000 unfavourable

20) What is the static-budget variance of variable costs?

A) \$200,000 favourable

B) \$50,000 unfavourable

C) \$50,000 favourable

D) \$250,000 unfavourable

E) \$250,000 favourable

21) What is the static-budget variance of operating income?

A) \$175,000 favourable

B) \$195,000 unfavourable

C) \$225,000 favourable

D) \$200,000 unfavourable

E) \$200,000 favourable

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