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1 OMAR Company reported a flexible budget variance for direct materials costs of $5,000 Favorable for the current year
1
OMAR Company reported a flexible budget variance for direct materials costs of $5,000 Favorable for the current year. If the direct materials price variance was $1,000 Favorable, what was the direct materials quantity variance? Select one: a. $6,000 Unfavorable b. $6,000 Favorable c. $4,000 Favorable d. $4,000 Unfavorable
2
ABC manufacturing firm prepares analysis for variable overhead variances. A $8,500 unfavorable flexible-budget variance indicates that ________. Select one: a. the flexible-budget amount exceeded actual variable manufacturing overhead by $8,500 b. the standard variable manufacturing overhead exceeded the flexible-budget amount by $8,500 c. the actual variable manufacturing overhead exceeded the flexible-budget amount by $8,500 d. the flexible-budget amount exceeded standard variable manufacturing overhead by $8,500
Expert Solution
1
Direct Material Cost variance = Direct Material Price Variance+ Direct Material Quantity Variance
Direct Material cost Variance =-$5,000 Favorable
Direct Material Price variance = -$ 1,000 Favorable
Direct Material Quantity Variance = Direct material cost Variance - Direct Material Price variance
=-$5,000 - (-$ 1,000) = $ 5,000 + 1,000
= -$4,000
answer : Direct Material Quantiry Variance = $4,000 Favorable
Answer : C) $4,000 Favorable
2
The flexible variable overhead budget indicates that the actual variable manufacturing overhead exceeded the flexible-budget amount by $8,500. Hence Option C is Correct.
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