# CMA Study Group

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## Can explain

• #### 1.  Can explain

Posted 18 days ago

• #### 2.  RE: Can explain

Posted 18 days ago
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.
Thanks,
Rebecca

• #### 3.  RE: Can explain

Posted 18 days ago
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.
Thanks,
Rebecca

--
**
Rebecca