Questions 1 and 2 refer to the following information The following information i

Question

Questions 1 and 2 refer to the following information The following information is for direct material cost for X Company for 2016: Budgeted pounds per unit of product Budgeted cost per $14.00 pound 2 5,250 units Budgeted production Actual pounds per unit of product Actual cost per pound $14.20 1.9 4,390 units Actual production 1. What was the direct material static budget for 2016? ) Tries 0/2 2. What was the direct material flexible budget variance for 2016 (a positive number means a favorable variance; a negative number means an unfavorable variance)?

Explanation / Answer

1. Direct material static budget = (5250*2*14) = 147000

2. Flexible budget variance = Flexible budget material cost-actual material cost

= (4390*2*14)-(4390*1.9*14.20)

Flexible budget variance = 4478 Favourable

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