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A company is budgeting to produce 400 units of product X in the next month. One unit of product X requires 10kg of material which is purchased at a budgeted price of $0.5 per kg. Actually, the company produced only 375 units of product X. Material was bough for $0.6 per kg and 9.8 kg was used to make one unit of product X.
Question 1: What is the variance between the flexed budgeted material cost and actual cost of material in the month (to the nearest $1)?
Option a) 330 favourable
Option b) 330 adverse
Option c) 205 favourable
Option d) 205 adverse
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