Answer:
July's direct material flexible−budget variance is <u>$ 1500</u>.unfav
Explanation:
Genent Industries, Inc. (GII),
Budgeted quantity Budgeted price
Direct materials 0.3 pounds $20 per pound
Direct labor 0.7 hours $20 per hour
Actual Price for 15000 pounds and 2,875 DLH
Direct Materials $17 per pound
Direct manufacturing labor hours wages $20.50 per hour.
July's direct material flexible−budget variance is <u>$ 1500</u>. unfav
Budgeted Cost for 4000 containers -Actual Cost for 4000 containers
= $ 24000- $ 25500 = $ 1500
Since the actual cost is greater it is unfavorable
Flexible Budget Variance is obtained by subtracting actual costs from flexible budget costs at a given volume.
1 container requires 0.3 pounds
4000 containers require 0.3 * 4000= 1200 pounds
But actually 1500 pounds were used .
Now costs
Budgeted Costs for 1200 pounds is = 20 *1200= $24000
Actual Costs for 1500 pounds is = 17* 1500 = $ 25 500
