Crystal Clear Company's budgeted production costs for the current year at an expected output of 20 000 units were:
$$\begin{array} { l r }
\text { Driect labour} & \$ 26 \text { per unit}\
\text { Direct materials } & \$ 14 \text { per unit}\
\text {Variable overhead } & \$ 8 \text { per unit}\
\text {Fixed overhead } & \$ 45000
\end{array}$$
Assume Crystal Clear uses a flexible budgeting system and actually produced 24 000 units at a total cost of $1 150 000. By how much did actual production cost differ from the flexible budget amount and in which direction?

Question

Crystal Clear Company's budgeted production costs for the current year at an expected output of 20 000 units were:
$$\begin{array} { l r } 
\text { Driect labour} & \$ 26  \text { per unit}\
\text { Direct materials } & \$ 14 \text { per unit}\
\text {Variable overhead  } & \$ 8 \text { per unit}\
\text {Fixed overhead  } & \$ 45000
\end{array}$$
Assume Crystal Clear uses a flexible budgeting system and actually produced 24 000 units at a total cost of $1 150 000. By how much did actual production cost differ from the flexible budget amount and in which direction?

Quizplus · Accepted Answer

The Answer of Crystal Clear Company's budgeted production costs for the current year at an expected output of 20 000 units were:
$$\begin{array} { l r } 
\text { Driect labour} & \$ 26  \text { per unit}\
\text { Direct materials } & \$ 14 \text { per unit}\
\text {Variable overhead  } & \$ 8 \text { per unit}\
\text {Fixed overhead  } & \$ 45000
\end{array}$$
Assume Crystal Clear uses a flexible budgeting system and actually produced 24 000 units at a total cost of $1 150 000. By how much did actual production cost differ from the flexible budget amount and in which direction?

Crystal Clear Company's Budgeted Production Costs for the Current Year