The actual information pertains to the month of June. As part of the budgeting process, Petrified Products Company developed the following master budget for June. The manager, Pete, is in the process of preparing the flexible budget and understanding the results.

-The flexible budget variance for flexible (variable)costs is:
A)$32,000 unfavorable.
B)$120,000 unfavorable.
C)$32,000 favorable.
D)$120,000 favorable.

Question

The actual information pertains to the month of June. As part of the budgeting process, Petrified Products Company developed the following master budget for June. The manager, Pete, is in the process of preparing the flexible budget and understanding the results.
 
-The flexible budget variance for flexible (variable)costs is:
A)$32,000 unfavorable. 
B)$120,000 unfavorable. 
C)$32,000 favorable. 
D)$120,000 favorable.

Quizplus · Accepted Answer

A)Actual cost - Flexible cost = $512,000 - $480,000 (See No. 112)= $32,000 U

The Actual Information Pertains to the Month of June