If the static budget variance for materials is $200 F and the budgeted cost for materials is $52,000,what is the actual cost of materials?
A)$51,200
B)$51,800
C)$52,000
D)$52,200

Question

Quizplus · Accepted Answer

The static budget variance formula is Actual Cost - Budgeted Cost. We know that the variance is $200 F (favorable) which means the actual cost must be lower than the budgeted cost.

$200 F = Actual Cost - Budgeted Cost
$200 F = Actual Cost - $52,000
Actual Cost = $52,000 - $200 F
Actual Cost = $51,800

Therefore, the actual cost of materials is $51,800 which is represented by choice B.

If the Static Budget Variance for Materials Is $200 F