Jason, Inc.produces leather purses.Jason has developed a static budget for the first quarter, based on 20,000 direct labor hours.During the quarter, the actual activity was 22,000 direct labor hours.Data for the first quarter are summarized as follows:

- What is the flexible budget variance for the first quarter?

Question

Jason, Inc.produces leather purses.Jason has developed a static budget for the first quarter, based on 20,000 direct labor hours.During the quarter, the actual activity was 22,000 direct labor hours.Data for the first quarter are summarized as follows:

- What is the flexible budget variance for the first quarter?

-  What is the flexible budget variance for the first quarter?

Quizplus · Accepted Answer

11ea8a4c_489c_1f01_a0e6_4fe44410d921_TB5550_00 The flexible budget here is created by creating standard rates from the static budget.
$80,000 or direct labor / 20,000 labor hours yields $4.00/labor hour.This standard rate
is multiplied by the actual labor hours to get the standard labor hours for the actual
activity level.