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Answer :
Given:
Budgeted revenue per unit = $52
The planned level of activity = 2,000 units
The actual level of activity = 2,180 units
Actual revenue = $104,000
We have to find the revenue activity variance.
Revenue activity variance:
It is the difference between actual revenue and budgeted revenue.
Actual revenue = Actual level of activity × Budgeted revenue per unit = 2,180 × $52= $113,360
Revenue activity variance= Actual revenue – Budgeted revenue
= $104,000 - $113,360= -$9,360
This variance is unfavorable because actual revenue is less than budgeted revenue.
The revenue activity variance is -$9,360
Budgeted revenue = Budgeted revenue per unit × Planned level of activity = $52 × 2,000= $104,000
Actual revenue = Actual revenue per unit × Actual level of activity
= $52 × 2,180 = $113,360
Revenue activity variance = Actual revenue – Budgeted revenue
= $113,360 - $104,000= $9,360
The company's revenue activity variance is $9,360.
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