Question

Abell and Creek, LLC has prepared the following flexible budget figures for the current period and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. Flexible Budget Price Variance Efficiency Variance Product A311 (total costs) $58,000 $1,500 F $3,000 U Product A325 (total costs) $42,000 $1,750 U $1,500 F Direct manufacturing labor only $71,000 $2,000 U $2,500 F Calculate the actual amount spent for Product A325 during the current period:

Answer 1

Abell and Creek, LLC

The actual amount spent for Product A325 during the current period is:

= $42,250.

Step-by-step explanation:

a) Data and Calculations:

Flexible Price Efficiency

Budget Variance Variance

Product A311 (total costs) $58,000 $1,500 F $3,000 U

Product A325 (total costs) $42,000 $1,750 U $1,500 F

Direct manufacturing labor only $71,000 $2,000 U $2,500 F

Actual amount spent for Product A325:

Flexible budget $42,000

Price variance 1,750 U

Efficiency variance 1,500 F

Actual = $42,250