Hercules Sports Equipment Company projected sales of 80,000 units at a unit sales price of $12 for the year.Actual sales for the year were 77,000 units at $15 per unit.Variable costs were budgeted at $2 per unit,and the actual amount was $5 per unit.Budgeted fixed costs totaled $388,000,while actual fixed costs amounted to $436,000.What is the flexible budget variance for variable costs?

Question

Quizplus · Accepted Answer

Flexible budget variance for variable costs = (Actual quantity * (Actual price - Budgeted price))
= (77,000 * ($5 - $2))
= $231,000 unfavorable.

Hercules Sports Equipment Company Projected Sales of 80,000 Units at a Unit