You are working with a manufacturer under Boardz Co. This company creates Board game tables from scratch. 35

They had the following forecasted/budgeted for the full 2020 year:

Sales in dollars $750,000

Selling price per unit $750

lumber pieces used per set 3

Cost for one unit of lumber $2.5

DLH per unit, $25 per 1.0

At the end on 2020, they knew the following:

Sales in dollars $625,000

Selling price per unit $500

lumber pieces used (total) 5,000

Cost for one unit of lumber $2

DL$ paid total, $24 per hour $100,000

Formulas

Price Var. = - (Actual price - budgeted price)*Actual Q

Efficiency Var. = -(Actual Quantity used - flex Budgeted Quantity) * Budgeted Price

Flexible budget variance = price + efficiency

Flexible budget variance also = actual total- flex budget total

Boardz has no idea what to make of the differences between flexible budgeted and actual. What are the two main variances, and can you quantify? Are they Favorable? Unfavorable? Why?

_________ variance:

________ variance

Flex budget variance