Question

A manufacturer planned to use $97 of materials per unit produced, but in the most recent period it actually used $95 of material per unit produced. During this same period, the company planned to produce 2,850 units, but actually produced only 2,500 units. The flexible-budget variance for materials, to the nearest dollar, is:

Answer 1

The flexible-budget variance for materials is $5,000 favorable.

Step-by-step explanation:

In order to calculate the The flexible-budget variance for materials we have to use the following formula:

Flexible budget variance for materials = Budgeted material cost for actual production - Actual material cost

= (2,500*$97) - (2,500*$95)

= $242,500-$237,500

= $5,000

Hence, The flexible-budget variance for materials is $5,000 favorable.