Exam 8: Flexible Budgets and Variance Analysis

The Brucker Company makes mugs for which the following standards have been developed: Standard Inputs Expected Standard Price Expected For Each Unit of Output Per Unit of Input Direct Materials 5 ounces \2 per ounce Direct Labor 1.5 hours \ 8 per hour Production of 400 mugs was expected in July,but 440 mugs were actually completed.Direct materials purchased and used were 2,100 ounces at an actual price of $2.30 per ounce.Direct labor cost for the month was $5,310,and the actual pay per hour was $9.00.What is the direct material price variance for July?

The flexible budget variance for direct labor can be broken down into a price variance and an effectiveness variance.

The following data are for Pablo Corporation: Flexible Budget for Actual Static Budget Actual Sales activity Units 18,000 16,000 18,000 Sales \3 60,000 \3 20,000 \3 60,000 Variable costs 234,000 192,000 216,000 Contribution margin \1 26,000 \1 28,000 \1 44,000 Fixed costs 76,000 80,000 80,000 Operating income \5 0,000 \4 8,000 \6 4,000 The flexible budget variance for operating income is ________.