Johnson Construction Materials Company has a sales office that sells concrete culvert pipes to property developers
The sales office is a revenue center and prepares a monthly responsibility report. The following information is provided.
Revenue Center Responsibility Report
Product
Type Actual
Sales
Revenue Flexible
Budget
Variance U/F Flexible
Budget Sales
Volume
Variance U/F Static
Budget
40 inch $31,700 $30,000 $40,800
36 inch long 40,200 42,200 33,000
36 inch short 36,000 33,100 31,100
32 inch 19,100 20,900 28,000
What is the flexible budget variance for the 40-inch pipe?
A) $1,700 U
B) $10,800 F
C) $10,800 U
D) $1,700 F
D .D) Flexible budget variance = Actual sales revenue - Flexible budget sales
Flexible budget variance = $31,700 - $30,000 = $1,700
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