Dozen Bakery makes cupcakes and cookies Dozen gathered the following information

Question

Dozen Bakery makes cupcakes and cookies Dozen gathered the following information for the current year regarding its use of flour and butter (flour is a direct material for cupcakes and buter is a direct material for cookies): Flour (D irect Materals) Cupcakes Materals) Standard quantity per batch Standard Price (SP) per pound of sugar Actual quantity purchasd (AQP)and used 3 lbs $250/1b pounds) 4 lbs $5 50lb Actual Price (AP) paid Price variance Quantity varance $3,100 U 400 Number of units produce d What is the direct materials flexible budget variance for the flour in cupcakes? O $200 favorable O $800 unfavorable O $800 favorable $200 unfavorable

Explanation / Answer

PRICE variance = 300 unfavourable

Quantity variance= 500 favourable

So flexible budget variance for the flour = (300)+500= 200 favourable.

So the answer is a) $200 favourable

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