Question

The following data is available regarding X Company' utility cost in 2017:

Estimated production	3,300 units
Budgeted fixed costs	$12,000
Budgeted total variable costs	$22,968
Actual production	2,900 units
Actual total costs	$23,180

What was the flexible budget variance for total utility costs in 2017 (assume that a positive number means a favorable variance and a negative number means an unfavorable variance)?

Answer 1

SOLUTION

Flexible budget variance for total utility costs in 2017 was- $$9,004 F

S.No.	Particulars	Amount
A	Budgeted Variable cost	$22,968
B	Budgeted production	3,300 units
C = A/B	Budgeted Variable cost per unit	$6.96
D	Actual Production	2,900 units
E = C x D	Flexible Budget Variable cost	$20,184
F	Flexible Budget Fixed Cost	$12,000
G = E+F	Total Flexible Budget Cost	$32,184
H	Actual Cost	$23,180
I = G - H	Flexible budget variance	$9,004 F