Answer the following questions using the information below:
Bradpon Incorporated planned to use $37.50 of material per unit but actually used $36.75 of material per unit,and planned to make 1800 units but actually made 1600 units.
-The flexible-budget variance is:
A)$7500 unfavourable.
B)$7500 favourable.
C)$1200 unfavourable.
D)$1200 favourable.

Question

Quizplus · Accepted Answer

The flexible-budget variance is calculated by comparing the actual cost to the flexible budget cost. The flexible budget cost is based on actual units produced (1600) at the planned cost per unit ($37.50). The actual cost is 1600 units at $36.75 per unit. The variance is (1600 * $37.50) - (1600 * $36.75) = $60,000 - $58,800 = $1,200 favourable.

Answer the Following Questions Using the Information Below