CDE Company provides the following standard cost data per unit of product: Variable overhead: $8.00 CDE anticipated that they would produce and sell 24,000 units. During the period, the company produced and sold 25,000 units incurring $210,000 of variable overhead costs. The variable overhead flexible budget variance was:

Question

Darius Steele

Business

12 June, 10:26

CDE Company provides the following standard cost data per unit of product: Variable overhead: $8.00 CDE anticipated that they would produce and sell 24,000 units. During the period, the company produced and sold 25,000 units incurring $210,000 of variable overhead costs. The variable overhead flexible budget variance was:

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Answers (1)

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Joslyn Miles · Answer 1

Variable overhead flexible budget variance

= (variable overhead rate x Actual output) - Actual variable overhead cost

= ($8 x 25,000 units) - $210,000

= $10,000 (A)

Explanation:

Variable overhead flexible budget variance is the difference between budgeted variable overhead cost and actual variable overhead cost. Budgeted variable overhead cost is obtained by the product of variable overhead rate and actual output.