Brad Company planned to produce 12,000 units.This level of production required 20 setups at a cost of $18,000 plus $500 per setup.Actual production was 10,000 units,requiring 15 setups.Actual setup cost was $26,000.What is the static budget variance for setup costs?
A) $2,000 Favorable
B) $2,000 Unfavorable
C) $2,500 Favorable
D) $2,500 Unfavorable

Question

Quizplus · Accepted Answer

The static budget variance for setup costs is $2,000 favorable. This is because the actual setup costs were $26,000, which is $2,000 less than the budgeted setup costs of $28,000.

Brad Company Planned to Produce 12,000 Units