Answer the following questions using the information below:
Melville Incorporated planned to use $37.50 of material per unit but actually used $36.75 of material per unit, and planned to make 1,800 units but actually made 1,600 units.
-The flexible-budget variance is:
A)$7,500 favorable
B)$7,500 unfavorable
C)$1,200 unfavorable
D)$1,200 favorable

Question

Quizplus · Accepted Answer

The flexible-budget variance is the difference between the budgeted cost of production and the actual cost of production. The budgeted cost of production is $37.50 per unit x 1,800 units = $67,500. The actual cost of production is $36.75 per unit x 1,600 units = $58,800. The flexible-budget variance is $67,500 - $58,800 = $8,700 favorable.

Answer the Following Questions Using the Information Below