Answer:
The dollar variance is -$100.
The percent variance is -20%.
Since the actual income is less than the budgeted income, the variance is unfavorable (U).
We calculate Dollar Variance as : [tex]Actual Amount - Budgeted Income[/tex]
[tex]Dollar Variance = 400 - 500 = 100[/tex]
Next, we calculate percent variance as :
[tex]Percent variance = \frac{Dollar Variance}{Budgeted Income} *100[/tex]
Plugging the values in we get,
[tex]Percent Variance = \frac{-100}{500} *100[/tex]
Percent Variance = -20%
