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27 June, 11:30

Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $ 12 each and used a budgeted selling price of $ 12 per unit. Actual Budgeted Units sold 42 comma 000 units 39 comma 000 units Variable costs $ 168 comma 000 $ 158 comma 000 Fixed costs $ 46 comma 000 $ 48 comma 000 What is the staticminusbudget variance of revenues?

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  1. 27 June, 12:28
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    The static budget variance of revenues is 36000 Unfavorable

    Explanation:

    Lincoln Corporation

    Static Budget Variances

    Actual Budgeted Static Budget

    Units sold Units sold Variance

    42,000 units 39,000 units

    Sales Price $ 12 $ 12

    Revenues 504000 468000 36000 Unfavorable

    Variable costs $ 168,000 $ 158,000 10,000 Unfavorable

    Fixed costs $ 46, 000 $ 48,000 2000 Favorable

    The Static Budget Variance is calculated by subtracting the budgeted amounts from the actual amounts.

    In a static budget the actual amounts are not changed for different activity levels. Instead the actual is compared with the budgeted so that exact variance is obtained for an organization.
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