Maryland Company planned to use $40 of material per unit, but actually used $38.75 of material per unit, and planned to make 2,000 units but actually made 1,785 units
Required:
Compute the flexible-budget amount; the flexible-budget variance; and, the sales-volume variance.
What will be an ideal response?
The flexible budget is $71,400. The flexible budget variance is $2,231.25 F; and, the sales-volume variance is $8,600 U.
Explanation: [(1,785 units × $40 )] = $71,400
[($38.75 - $40 ) × 1,785 )] = $2,231.25 F
[(1,785 - 2,000 ) × $40 )] = $8,600 U
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