Classic Products Company manufactures colonial style desks. Some of the company\
ID: 2578857 • Letter: C
Question
Classic Products Company manufactures colonial style desks. Some of the company's data was misplaced. Use the following information to replace the lost data: Actual Flexible Budget Flexible Sales-VolumeStatic ResultsVariances BudgetVariancesBudget sold 490 490,00 448,3 evenues $187.25 $5,000 F $6,260 (C $71 $890 $3,740 F $40,41 $82 $40,41 $10,800 F xed costs $36,6 ating $78.4 $70 E $66 What amounts are reported for revenues in the flexible-budget (A) and the static-budget (B), respectivelv? OA. OB. OC. $180,990, $188.510 $187.250, $185.990 $102,250, $188,510 D. $192,250; $175,990Explanation / Answer
The flexible budget revenue will be favorable when the actual revenue is more than the revenue reported under flexible budget. Therefore, we can determine the value of flexible budget revenue (A) as below:
Flexible Budget Revenue (A) = Actual Revenue - Flexible Budget Variance = 187,250 - 5,000 = $182,250
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The sales volume variance will be unfavorable when the flexible budget revenue is less than the static budget revenue. The amount to be reported in static budget revenue (A) is calculated as follows:
Static Budget Revenue (B) = Flexible Budget Revenue + Sales Volume Variance = 182,250 + 6,260 = $188,510
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Answer is $182,250, $188,510 (which is Option C)