Consider the following about Taylor Corporation: Assuming Taylor Corporation uses flexible budgeting,what is the direct materials variance?

Question

Consider the following about Taylor Corporation:  Assuming Taylor Corporation uses flexible budgeting,what is the direct materials variance?

Quizplus · Accepted Answer

The direct materials variance can be calculated as actual cost of direct materials used minus (flexible budgeted cost of direct materials per unit times actual quantity of units produced). Using the given information, the calculation is: 
Actual cost of direct materials used = $256,000 
Flexible budgeted cost of direct materials per unit = $15 
Actual quantity of units produced = 18,000 
So, direct materials variance = $256,000 - ($15 x 18,000) = $26,000 unfavorable. Therefore, the best choice is C, $20,000 unfavorable.

Consider the Following About Taylor Corporation: Assuming Taylor Corporation