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EA17.
LO 7.5The production cost for a waterproof phone case is $7 per unit and fixed costs are $23,000 per month. How much is the favorable or unfavorable variance if 5,500 units were produced for a total of $61,000?

Respuesta :

Answer:

$500 (Favorable)

Explanation:

Given that,

Production cost = $7 per unit

Fixed costs = $23,000 per month

Units produced = 5,500

Actual total costs = $61,000

Standard cost = Fixed cost + Variable cost

                        = $23,000 + ($7 × 5,500)

                        = $23,000 + $38,500

                        = $61,500

Variance = Standard cost - Actual total costs

               = $61,500 - $61,000

               = $500 (Favorable)

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