The static budget, at the beginning of the month, for Redwyne Company follows

Static budget:
Sales volume: 2,000 units; Sales price: $50.00 per unit
Variable costs: $14.00 per unit; Fixed costs: $25,000 per month
Operating income: $47,000

Actual results, at the end of the month, follows:
Actual results:
Sales volume: 1,900 units; Sales price: $58.50 per unit
Variable costs: $16.00 per unit; Fixed costs: $33,000 per month
Operating income: $47,750

Calculate the flexible budget variance for variable costs.
A) $30,400 U
B) $4,350 U
C) $3,800 U
D) $26,600 F

C .C)
Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget
Units/Volume 1,900 0 1,900 100 U $2,000
Sales Revenue* $111,150 $16,150 F $95,000 $5,000 U $100,000
Variable Costs** 30,400 3,800 U 26,600 $1,400 F 28,000
Contribution Margin $80,750 $12,350 F $68,400 $3,600 U $72,000
Fixed Costs 33,000 8,000 U 25,000 $0 25,000
Operating Income/(loss) $47,750 $4,350 F $43,400 $3,600 U $47,000

* Sales price per unit x Units
** Variable cost per unit x Units