Economics · Management Accounting
A machine maintenance department has a total cost structure represented by Y = $5,000 + 0.20X, where Y is the total cost and X is the machine hours. If actual machine hours were 40,000 and the actual total cost was $12,500, what is the variance from the flexible budget?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$2,500 Favourable
- 2$500 Favourable✓
- 3$3,000 Adverse
- 4$1,500 Adverse
Correct answer
$500 Favourable
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