The costs below relate to the month of June. Fixed budget Flexed budget Actual 2,200 units 2,000 units 2,000 units Total direct materials $165,000 $150,000 $140,000 What was the total direct material variance? A $10,000 Adverse B $10,000 Favourable C $25,000 Adverse D $25,000 Favourable
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.
The costs below relate to the month of June.
Fixed budget Flexed budget Actual
2,200 units 2,000 units 2,000 units
Total direct materials $165,000 $150,000 $140,000
What was the total direct material variance?
A $10,000 Adverse
B $10,000 Favourable
C $25,000 Adverse
D $25,000 Favourable
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