Hi Ayat,
I shouldn't have put the $110,000 in the Actuals column, since truly we don't know what fixed costs were 'actually'.
But just remember the Flex Budget matches the Volume / quantity of Actuals.
I think this is a little better chart (to not include the $110,000 in actual, fixed costs).
| Actual | Price
Variance | Flex
Budget | Volume
Variance | Static
Budget |
| QTY | Volume same as Flex | | 121,000 | | |
| | | | | |
| Variable | | | $60,500 | | |
| Fixed | | | $110,000 | | $110,000 |
| Total | $178,500 | $8000 U | $170,500 | $5000 F | $165,500 |
Rebecca
On Tue, Mar 10, 2020 at 10:17 AM Rebecca McNeely <
rebmcneely@...> wrote:
Good morning, Ayat,
Here is how I did it and believe the answer is 121,000 hours.
| Actuals | Price
Variance | Flex Budget | Volume
Variance | Static Budget | |
| same as Flex | | 121,000.00 | | | |
| | | | | |
| | | | | | |
| | $ 60,500.00 | | | |
| $ 110,000.00 | | $ 110,000.00 | | $ 110,000.00 | Fixed |
| $ 178,500.00 | 8000 U | $ 170,500.00 | 5000 F | $ 165,500.00 | |
The only thing the flex budget equals to actuals is Quantity. I got the total bottom line Flex Budget total of $170,500 using the price and volume variances. Since there is an Unfavorable price amount of $8000, the flex budget total must be $170,500. Deduct the fixed of $110,000 to get $60,500. $60,500 / .50 per hour = 121,000 hours.
Let me know if you have questions.
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