Seinfeld Company Planned to Produce 12,000 Units

question 39

Multiple Choice

Seinfeld Company planned to produce 12,000 units.This level of activities required 20 set-ups at a cost of $18,000 plus $500 per set-up.Actual sales were 10,000 units, requiring 15 set-ups and 12,000 machine hours.Actual set-up cost was $26,000._____ is the flexible-budget variance for set-ups.

• A)$2,000 favorable
• B)$2,000 unfavorable
• C)$500 favorable
• D)$500 unfavorable

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