Respuesta :
Therefore the revenue variance is $8,717 which is unfavorable
What are administrative expenses?
The expenditures of paying wages and salaries as well as perks to non-sales staff are referred to as administration expenses. Operating expenses are one of three categories of costs that make up a business. Selling and miscellaneous expenses round out the list.
On a company's income statement, administrative costs are shown as indirect expenses because they don't directly support the production of goods or the provision of services. Administration costs are referred to as fixed costs since they often remain constant even when output volumes alter (as opposed to variable costs or semi-variable).
What are the examples of administrative expenses?
Salaries for senior management and prices for general services or supplies, such as legal, accounting, secretarial labour, and information technology, are examples of administrative expenses. These expenses are typically not included in gross margin calculations because they are typically not directly tied to the creation of a company's products or services. Administrative costs are listed on the income statement underneath cost of goods sold (COGS) and may be combined with other costs like general or selling costs. Some administrative costs are recurring since they are a necessary component of running a firm.
Briefing:
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 × $35.10
= $127413
And, the actual revenue is $136,130
So, the revenue variance is
= $136130 - $127413
= $8,717 unfavorable
We simply deduct the actual revenue from the flexible budget revenue so that the revenue variance could come
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