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What is the flexible budget variance for direct materials

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Reference no: EM132603153

Loden is a local dress shop that makes casual dresses in fun prints. Below is some actual vs. budget information for Loden's dresses for the month of May. Assume no beginning/ending inventories for simplicity. The cost-allocation base for both variable and fixed overhead is direct labor-hours.

Data for the Month of May                  Static                    Actual Budget#

Dresses made and sold                      2,600                    2,400

Selling price per dress                           $39                       $40

Yards of fabric per dress                          2.93

Cost per yard of fabric                            $3.84                     $3.66

Time in hours to sew one dress                  10.9

Cost of direct labor (per hour)                      $14                          $15

Variable overhead costs                             $3,500                      $3,000 (utilities, sewing machine maintenance, etc.)

Fixed overhead costs                                $4,900                          $4,800(store rent, insurance, etc.)

Question 1: What is the flexible budget variance for direct materials?

a. $405.60 U

b. $2,601.60 U

c. $405.60 F

d. $2,601.60 F

Reference no: EM132603153

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