Question

Fancy Nails' budgeted revenue is $20 per manicure. The planning budget for June was based on 2,400 manicures. During June, the actual revenue was $49,750 for 2,500 manicures. The revenue variance for June is Blank______.

Multiple choice question.

$250 F


$250 U


$1,750 U


$1,750 F

Answer 1

To calculate the revenue variance for June, we need to compare the actual revenue to the budgeted revenue based on the actual number of manicures performed.

1. **Budgeted revenue** per manicure: $20
2. **Budgeted number of manicures**: 2,400

So the budgeted revenue for June is:
\[
\text{Budgeted Revenue} = \text{Budgeted number of manicures} \times \text{Budgeted revenue per manicure}
\]
\[
\text{Budgeted Revenue} = 2,400 \times 20 = 48,000
\]

3. **Actual revenue**: $49,750

4. **Revenue variance** is calculated as:
\[
\text{Revenue Variance} = \text{Actual Revenue} - \text{Budgeted Revenue}
\]
\[
\text{Revenue Variance} = 49,750 - 48,000 = 1,750
\]

Since the actual revenue of $49,750 is greater than the budgeted revenue of $48,000, this is a favorable variance (F).

Thus, the revenue variance for June is **$1,750 F**.

The correct answer is **$1,750 F**.