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static budget variance, flexible budget variance

Your company uses a standard costing system.
At the beginning of the month, you budget to produce and sell 100 items.
Actual units produced are 120.
Standards for direct material are 4 lbs per unit at a standard price of $3 per pound.
Actual material purchased and used was 450 lbs.
Actual price paid was $2.90 lb.
All units produced were sold.
Consider direct material cost and calculate the following:
Static budget Variance
Flexible budget variance
sales volume variance
efficiency variance
price variance

Label each variance with its name and favorable or not.

Solution Preview

Your response is in Excel to give you a template for future problems. The formulas are in the cells ...

Solution Summary

Your response is in Excel to give you a template for future problems. The formulas are in the cells so you can see what I used to get all the amounts. The sales price was missing so you need to provide that in the indicated cell and the sales volume variance will compute automatically.

$2.19