Question

Jason, Inc. produces leather purses. Jason has developed a static budget for the first quarter, based...

Jason, Inc. produces leather purses. Jason has developed a static budget for the first quarter, based on 20,000 direct labor hours. During the quarter, the actual activity was 22,000 direct labor hours. Data for the first quarter are summarized as follows:

​

​

Static budget
(20,000 hours)

Actual costs
(22,000 hours)

Direct materials cost

$ 80,000

$ 87,000

Direct labor cost

160,000

174,000

Building rental

48,000

50,000

Total

$288,000

$311,000

​

What is the flexible budget variance for the first quarter?

a.

$1,000 U
b.

$23,000 U
c.

$23,000 F
d.

$1,000 F
e.

None of these.
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