The following is monthly budgeted cost and activity information for two activities in the purchasing department of X Company:
In November, actual costs and activity were as follows:
What was the flexible budget variance for the invoicing activity for November (assume that favorable variances are positive numbers and unfavorable variances are
Solution
Hi,
Please find the detailed answer as follows:
Flexible Budget Variance = Actual Invoicing Cost - Standard Invoicing Cost for 881 Units = 33442 - (10800/900*881 + 23700) = 830 (Favorable)
Answer is 830 (Favorable)
Thanks.
.
1. The following is monthly budgeted cost and activity information for two activities in the
purchasing department of X Company:
In November, actual costs and activity were as follows:
What was the flexible budget variance for the invoicing activity for November (assume that
favorable variances are positive numbers and unfavorable variances are
Activity Variable Costs Fixed Costs Cost Driver
Supplier relations $6,210 $15,400 230 suppliers
Invoicing $10,800 $23,700 900 invoices
Solution
Hi,
Please find the detailed answer as follows:
Flexible Budget Variance = Actual Invoicing Cost - Standard Invoicing Cost for 881 Units =
33442 - (10800/900*881 + 23700) = 830 (Favorable)
Answer is 830 (Favorable)
Thanks.
