Margaret Duffy Company Has the Following Information Available The Cost Driver of Product Costs Is Units of Output

question 1

Multiple Choice

Margaret Duffy Company has the following information available:
$\begin{array} { l } \text {Budgeted cost of direct materials at 900,000 units }&\$900,000 \\ \text {Budgeted cost of direct materials at 820,000 units }&\$820,000 \\ \text {Actual cost of direct materials at 820,000 units }&\$840,000 \\ \text {Actual level of output(units) }&820,000 \\ \text {Planned level of output(units) }& 900,000\\\end{array}$

The cost driver of product costs is units of output.What is the flexible budget variance for direct material costs?

• A) $20,000 Unfavorable
• B) $20,000 Favorable
• C) $60,000 Favorable
• D) $60,000 Unfavorable

Apply accounting principles to real-world transaction recording and financial statement preparation.

Understand the basic components of financial statements.

Apply the accounting equation to solve financial problems.

Prepare an income statement.