Question

Data used in budgeting: Fixed element per month Variable element per tenant-day Revenue - $ 34.50 Wages and salaries $ 2,500 $ 7.50 Food and supplies 1,500 14.00 Facility expenses 8,000 3.00 Administrative expenses 6,500 0.60 Total expenses $ 18,500 $ 25.10 Actual results for March: Revenue $ 121,234 Wages and salaries $ 28,550 Food and supplies $ 53,125 Facility expenses $ 18,250 Administrative expenses $ 7,095 The revenue variance for March would be closest to:

Answer 1

$4,001 unfavorable

Step-by-step explanation:

The computation of the revenue variance is shown below:

Revenue variance = Revenue at Flexible budget - Actual revenue

where,

Revenue at flexible budget is

= 3,630 × $34.50

= $125,235

And, the actual revenue is $121,234

So, the revenue variance is

= $125,235 - $121,234

= $4,001 unfavorable

We simply deduct the actual revenue from the flexible budget revenue so that the revenue variance could come