The following information is for direct material cost for X Company for 2016 Bud

Question

The following information is for direct material cost for X Company for 2016 Budgeted pounds per unit of product Budgeted cost per pound Budgeted production Actual pounds per unit of product Actual cost per pound Actual production 2.8 $13.50 5,210 units 2.7 $13.80 4,280 units 1. What was the direct material static budget for 2016? $196,938 You are correct. Previous Tries Your receipt no. is 152-4233 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)? 3467 Submit Answer Incorrect. Tries 1/2 Previous Tries

Explanation / Answer

Direct material flexible budget = Budgeted input Qty allowed for actual output x Budgeted price

                                            = 2.8 x 4280 x $ 13.50

                                            = $ 161784

Actual Qty x Actual price = 2.7 x 13.80 x 4280 = 159472.80

Actual Qty x budgeted price = 2.7 x 13.50 x 4280 = 156006

Budgeted input Qty allowed for actual output x Budgeted price = 2.8 x 4280 x $ 13.50 = $ 161784

Price Variance = 159472.80 - 156006 = 3467 U

Efficiency Variance = 156006 - 161784 = 5778 F

Flexible Budget variance = 3467 U + 5778 F = 2311 F

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