Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units were produced with the following actual costs:

-Refer to Figure 11-3. Calculate the variance for maintenance using an after-the-fact flexible budget.
A) $13,000 U
B) $13,100 F
C) $11,000 U
D) $1,000 F
E) None of these.

Question

Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units were produced with the following actual costs:
 
-Refer to Figure 11-3. Calculate the variance for maintenance using an after-the-fact flexible budget.
A) $13,000 U 
B) $13,100 F 
C) $11,000 U 
D) $1,000 F 
E) None of these.

Quizplus · Accepted Answer

The variance for maintenance is $13,100 unfavorable. This is calculated by taking the actual maintenance cost of $26,100 and subtracting the flexible budget amount of $13,000.

Montgomery Normally Produces 15,000 Units (Each Unit Requires 0