Kramer Company Planned to Produce 12,000 Units

Multiple Choice

Kramer Company planned to produce 12,000 units. This level of activities required 20 set- ups at a cost of $18,000 plus $500 per set- up. Actual sales were 10,000 units, requiring 15 set- ups and 12,000 machine hours. Actual set- up cost was $26,000. is the flexible- budget variance for set- ups.

A) $2,000 favorable
B) $500 favorable
C) $500 unfavorable
D) $2,000 unfavorable