Compute the variances in dollar amount and in percentage. (Round to the nearest whole percent.) Indicate whether the variance is favorable (F) or unfavorable (U). Budgeted Income Amount $25.00 Actual Amount $17.50

Dollar variance = - 7.5

Percent variance = - 30%

unfavorable variance (U)

Explanation:

Since the actual amount is less than the budgeted income amount, the variance is unfavorable (u).

For the dollar variance, we calculate:

Dollar variance = actual amount - budgeted income amount

Replacing with the values given:

Dollar variance = 17.50 - 25 = - 7.5

And finally, for the percentage we calculate:

Percent variance = (dollar variance / budgeted income) x 100

Percent variance = (-7.5 / 25) x 100 = - 0.3 x 100 = - 30%

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