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Can someone explain to me why answer D, is the correct answer to this question? I thought that the Flexible Budget was the Master Budget prices, adjusted for actual results. I am wondering why it’s not 10,000 Favorable.
Quick Co. was analyzing variances for one of its operations. The initial budget forecast production of 20,000 units during the year with a variable manufacturing overhead rate of $10 per unit. Quick produced 19,000 units during the year. Actual variable manufacturing costs were $210,000. What amount would be Quick’s flexible budget variance for the year?
$10,000 favorable.
$20,000 favorable.
$10,000 unfavorable.
$20,000 unfavorable.
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