Question

nswer the following five questions (12-16) using the information below:

Rudolph Industries, Inc. (RII), developed standard costs for direct material and direct labor. In 2004, RII estimated the following standard costs for one of their major products, the 10-gallon plastic container.

	Budgeted quantity	Budgeted price
Direct Materials	0.10 Pounds	$30 per pound
Direct labor	0.05 hours	$15 per hour

During June, RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct manufacturing labor-hours at an average wage of $15.25 per hour.

June's direct material flexible-budget variance is:

	A.	$980 unfavorable
	B.	$300 favorable
	C.	$680 unfavorable
	D.	None of these answers are correct.

Answer 1

Budgeted price of Direct Materials of 5000 units
Direct Materials = 5000 X 0.10 Pounds=	500	Pounds
X Standard Budgeted rate -	30	Per pound
Total Budgeted cost of 5000 units (A)	$             15,000
Actual material used	490	Pounds
Average cost of material =	32	Per pound
Total Actual Cost (B)	$             15,680
Material Flexible Budgetd Variance (Budgted Cost of 5000 units - Actual Cost of 5000 units)
Material Flexible Budgetd Variance (A-B) =	$             15,000	"-"	$            15,680
Material Flexible Budgetd Variance	680	Unfavorable
Answer = Option C = $ 680 (Unfavorable )