Alexandria Engines Incorporated planned to use $37.50 of material per unit but actually used $36.75 of material per unit, and planned to make 1,800 units but actually made 1,600 units.
-The flexible-budget variance is:

Question

Quizplus · Accepted Answer

The flexible-budget variance for materials can be calculated by comparing the actual cost of materials to the expected cost of materials based on the actual output. The expected cost of materials for the actual output (1,600 units) at the planned rate ($37.50 per unit) is $60,000 (1,600 units * $37.50). The actual cost of materials is $58,800 (1,600 units * $36.75). Therefore, the variance is $1,200 favorable, as the actual cost is less than the expected cost.

Alexandria Engines Incorporated Planned to Use $37