Question

Heavy​ Products, Inc.​ (HPI) developed standard costs for direct material and direct labor. In​ 2020, HPI estimated the following standard costs for one of their major​ products, the​ 10-gallon plastic container.

Budgeted quantity Budgeted price
Direct materials 0.1 pounds $90 per pound
Direct labor 0.2 hours $30 per hour
During​ June, Heavy Products produced and sold 21,000 containers using 2,400 pounds of direct materials at an average cost per pound of $93 and 2,100 direct manufacturing​ labor-hours at an average wage of $30.50 per hour. June's direct material flexible-budget variance is:_____.
A) $18,720 favorable.
B) $880,000 unfavorable.
C) $100,000 favorable.
D) $60,000 unfavorable.

Answer 1

$34,200

Step-by-step explanation:

Calculation to determine what June's direct material flexible-budget variance is

Flexible-budget variance = (2,400 × $93) − (21,000 × 0.1 × $90)

Flexible-budget variance =$223,200-$189,000

Flexible-budget variance =$34,200 U