Question

If a company has the following data, is the budget variance favorable or unfavorable? Budgeted Sales $10,000 Actual Sales. $8,000

Answer 1

$2,000 unfavorable

Step-by-step explanation:

The computation of the budget variance is shown below:

Budget variance is

= Budgeted sales - actual sales

where,

Budgeted sales is $10,000

And the actual sales is $8,000

Now placing these values to the above formula

So, the budget variance is

= $10,000 - $8,000

= $2,000 unfavorable

Since the actual sales is less than the budgeted sales so the same is to be unfavorable else it is favorable