Spending variance, 46,675 – 43,175 = 3,500CHF U
300 × 11CHF
= Efficiency variance,
Flexible-budget variance, 6,800CHF U
The flexible-budget allowance for any variable cost is the same as (is equal to) the total standard quantity allowed for the good units produced times the standard price.
The budget allowance under standard costing for variable costs always depends on output, the units produced. Therefore, the direct labor budget for 2,900 units is, as shown above, 2,900 units × 1.25 hours × 38CHF = 137,750CHF. For 3,900 units, the budgetary allowance would be 3,900 units × 1.25 hours × 38CHF = 185,250CHF. Note again that a budget can be established after the fact — after the number of units produced is known.
Compute the following:
a. materials purchase-price variance.
I may no be understanding this, it appears according to the table the variance has already been calculated?
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