The static budget variance for materials is $250 F and the budgeted cost for materials is $52,000. If the budgeted volume is 13,000 and the actual volume is 13,500, then the flexible budget variance is
A)$2,250 F.
B)$3,050 F.
C)$2,050 F.
D)$1,850 F.

Question

Quizplus · Accepted Answer

The flexible budget variance is calculated as the difference between the actual cost and the flexible budget cost. The flexible budget cost is calculated by multiplying the actual volume by the flexible budget rate. The flexible budget rate is calculated by dividing the budgeted cost by the budgeted volume.In this case, the budgeted cost for materials is $52,000 and the budgeted volume is 13,000. Therefore, the flexible budget rate is $52,000 / 13,000 = $4.The actual volume is 13,500. Therefore, the flexible budget cost is $4 * 13,500 = $54,000.The actual cost is $52,250. Therefore, the flexible budget variance is $54,000 - $52,250 = $2,250 F.

The Static Budget Variance for Materials Is $250 F and the Budgeted