Dynondo Incorporated planned to use materials of $12 per unit but actually used materials of $13 per unit, and planned to make 1,500 units but actually made 1,800 units. 2. The flexible-budget amount for materials is . a) $18,000 b) $19,500 c) $21,600 d) $23,400 3. The flexible-budget variance for materials is . a) $1,500 favorable b) $1,800 unfavorable c) $1,500 unfavorable d) $1,800 favorable 4. The sales-volume variance for materials is . a) $3,600 favorable b) $3,900 unfavorable c) $3,600 unfavorable d) $3,900 favorable

A Flexible Budget adjusts the volume of an already approved Master Budget to reflect the Actual Volumes before carrying out a variance Analysis of Actual versus Budget. This is unlike the normal variance process where the volume is for Budget remains fixed and is compared to Actual to reflect a favorable or unfavorable comparison

Budgeted Material Cost = $12 Per Unit.......(a)

Actual Material cost = $13 Per Unit.......(b)

Actual Volume = 1,800......(c)

Budgeted Volume = 1,500......(d)

A. Flexible Material Budget amount = (c) x (a) = 1,800 x $12

= $21,600.........(e)

B. Flexible Material Budget Variance = Actual Material Cost minus (e)

= ($13 x 1,800) minus $21,600

= $23,400 - $21,600

=$1,800 (unfavorable)

C. The sales-volume variance for materials = Budgeted Price per Unit x (Actual Units Sold – Budgeted Units Sold)

= (a) x [(c) - (d)]

= $12 x (1,800 minus 1,500)

= $12 x 300

= $3,600.

anthougo anthougo · Answer 2 · 2022-01-04T11:05:49+01:00

1. The flexible-budget amount for materials is c) $21,600 ($12 x 1,800).

2. The flexible-budget variance for materials is b) $1,800 unfavorable ($13 x 1,800 - $21,600).

3. The sales-volume variance for materials is a) $3,600 favorable ($12 x 300).

Data and Calculations:

Standard material price per unit = $12

Actual material price per unit = $13

Planned production units = 1,500 units

Actual production units = 1,800 units

The variance in units produced and sold = 300 units (1,800 - 1,500) favorable.

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