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1 ABC Corporation reported a flexible budget variance for direct labor of $16,000 Favorable for the current year
1
ABC Corporation reported a flexible budget variance for direct labor of $16,000 Favorable for the current year. If the direct labor price variance was $4,000 Unfavorable, what was the direct labor efficiency variance? Select one: a. $20,000 Favorable b. $12,000 Unfavorable c. $20,000 Unfavorable d. $12,000 Favorable
2
HONDA Manufacturing Company prepares master budget. Flexible budget variances are the deviations of actual results from the ________.
Select one:
a. flexible budget amounts for the achieved level of activity
b. flexible budget amounts for the static level of activity
c. static budget amounts for the expected level of activity
d. static budget amounts for last year's level of activity
Expert Solution
1
| Answer: a. $20,000 Favorable |
Calculation:
| Direct labor efficiency variance = Flexible budget variance - Direct labor price variance |
Flexible budget variance = $16,000 Favorable
Direct labor price variance = $4,000 Unfavorable
|
Direct labor efficiency variance = $16,000 - (-$4,000) = $16,000 + $4,000 = $20,000 Favorable 2 Answer : A) Flexible budget amounts for the Achieved level of Activity Flexible Budget Variance is the difference between the actual results ( revenues and Expenses) and Flexible budgeted values at the actual level of Activity. Flexible budget Variance = Actual Results - Flexible budget value ( at Actual Level of Activity ) |
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