Ch. 9 Flexible Budgets
Introduction to Variance
Ch. 9 Flexible Budgets
Introduction to Variance: Videos & Practice Problems
0
Concept
Introduction to Variance
Video duration:
4m0
Example
Introduction to Variance
Video duration:
2m0
Problem
A business observes that their actual quantity produced is 15,000 units, their budgeted direct materials cost per unit is \$4, and their actual total direct materials costs are \$64,000. What is the variance in this business’ total direct materials cost? Is that variance favorable or unfavorable?
A
\$4,000, Unfavorable
B
\$4,000, Favorable
C
\$63,996, Unfavorable
D
\$63,996, Favorable
