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?

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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