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Nadusha1986 [10]
3 years ago
8

The Tree Company provides the following standard cost data per unit of product: Variable overhead $ 8.00 Tree Co. anticipated th

at they would produce and sell 24,000 units. During the period, the company produced and sold 25,000 units, incurring $210,000 of variable overhead costs. The variable overhead flexible budget variance was: A. $8,000 unfavorable. B. $10,000 unfavorable. C. $8,000 favorable. D. $10,000 favorable.
Business
1 answer:
olya-2409 [2.1K]3 years ago
5 0

Answer:

Flexible budget variance= $10,000 unfavorable

Explanation:

Giving the following information:

Standard Variable overhead=  $8.00 per unit

During the period, the company produced and sold 25,000 units, incurring $210,000 of variable overhead costs.

<u>First, we need to calculate the standard variable overhead cost:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 8*25,000

Allocated MOH= $200,000

<u>Now, the flexible budget variance:</u>

Flexible budget variance= allocated overhead - actual overhead

Flexible budget variance= 200,000 - 210,000

Flexible budget variance= $10,000 unfavorable

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