Leshan Company planned to produce12,000 units. This level of production required 20 setups at a cost of$18,000 plus$500 per setup. Actual production was10,000 units, requiring 15 setups. Actual setup cost was$26,000. What is the flexible budget variance for setupcosts?

A.

$500 Unfavorable

This is the correct answer.

B.

$2,000 Favorable

C.

$2,000 Unfavorable

Your answer is not correct.

D.

$500 Favorable