At the start of 2020 , XYZ Company Developed the following budgeted total cost function i.e $12.50X + $676400, Where X is number of units produced . Budgeted Production for the year was 17500 units, but actual production for the year was 20400 units. Actual total cost were $ 456700. What was the 2021 flexible budget variance for total costs , positive number indicates the favorable variance and negative number means unfavorable variance.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
At the start of 2020 , XYZ Company Developed the following budgeted total cost function i.e $12.50X + $676400, Where X is number of units produced . Budgeted Production for the year was 17500 units, but actual production for the year was 20400 units. Actual total cost were $ 456700.
What was the 2021 flexible
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