Reference no: EM132607911

The Baily Division recorded operating data as follows for the past two years:

                                                   Year 1                       Year 2

Sales                                      ?                  $1,200,000

Shareholders' Equity              $540,000             $720,000

Average Operating Assets       $600,000                   ?

Margin                                    15%                         ?

Return on Investment                22.5%                  18%

Baily Division's turnover was exactly the same in both Year 1 and Year 2.

Problem 1: What was the fixed overhead budget variance for the period, rounded to the nearest dollar?

A) $900 favourable.

B) $452 unfavourable.

C) $900 unfavourable.

D) $452 favourable.