Question

Brennen Incorporated planned to use $24 of material per unit but actually used $25 of material per unit, and planned to make 2,000 units but actually made 2,400 units.

A) The flexible-budget amount is

		$48,000
		$50,000
		$57,600
		$60,000

B) The flexible-budget variance is:

		$9,600 favorable
		2,400 unfavorable
		$10,000 unfavorable
		$12,000 favorable

C) The sales-volume variance is:  

		$9,600 unfavorable
		$2,400 unfavorable
		$10,000 unfavorable
		$12,000 favorable

Answer 1

Actual cost = Actula Units * Actual Cost Per unit

=25*2,400 = 60,000

Felxible Budget cost = Actual Unit * Budget cost Per Unit

= 2,400*24 =57,600

Planning Budget Amount = Planning Units * Planning Cost per unit

= 24*2000 = 48,000

A) Felxible Budget amount  

= $57,600

B) Flexible Budget Variance = actual cost- Felxible budget cost

= 60,000-57,600

= $2,400 Unfavorable

C) Sales Volume variance = Felxible Budget - Planning Budget

= 57,600-48,000

= 9,600 Unfavorable