Questions 1 and 2 refer to the following information The following information i

Question

Questions 1 and 2 refer to the following information

The following information is for direct labor cost for X Company for 2016:

1. What was the direct labor static budget for 2016? $222,921

2. What was the direct labor flexible budget variance for 2016 (a positive number means a favorable variance; a negative number means an unfavorable variance)???????

Budgeted labor hours per unit of product 3.7 Budgeted hourly wage rate $13.30 Budgeted production 4,530 units Actual labor hours per unit of product 3.4 Actual hourly wage rate $13.40 Actual production 4,130 units

Explanation / Answer

1. Static labour budget = (4530*3.7*13.30) = $222921

2. Flexible budget variance = (Flexible budget cost-actual cost)

= (4130*3.7*13.30)-(4130*3.4*13.40)

Flexible budget variance = 15075 favourable

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