Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00.Actual current year sales were 55,000 units at $22.00 per unit.Actual variable costs,budgeted at $14.00 per unit,totaled $15.00 per unit.Budgeted fixed costs totaled $400,000 while actual fixed costs amounted to $420,000.
-What is the flexible budget variance for variable expenses?

Question

Quizplus · Accepted Answer

The flexible budget variance for variable expenses is the difference between the actual variable expenses and what was expected based on the flexible budget.

The flexible budget amount for variable expenses is:
55,000 units x $14.00 per unit = $770,000

The actual variable expenses amount is:
55,000 units x $15.00 per unit = $825,000

The flexible budget variance for variable expenses is:
Actual variable expenses - Flexible budget variable expenses
= $825,000 - $770,000
= $55,000 unfavorable

Therefore, the correct choice is C) $55,000 unfavorable.

Zany Brainy Projected Current Year Sales of 50,000 Units at a Unit