Ask Question
26 May, 10:12

At 13000 direct labor hours, the flexible budget for indirect materials is $26000. If $28400 are incurred at 13400 direct labor hours, the flexible budget report should show the following difference for indirect materials:

$2400 favorable.

$2400 unfavorable.

$1600 favorable.

$1600 unfavorable.

+1
Answers (1)
  1. 26 May, 10:25
    0
    Variance will be $1600 (unfavorable)

    So option (d) will be the correct option

    Explanation:

    We have given indirect labor hours = 13000

    And the flexible budget for indirect material = $26000

    So indirect material cost [tex]=/frac{flexible / budget / for / indirect / material}{indirect / labor / hour}=/frac{$26000}{13000}=2 / per / direct / labor / hour[/tex

    Budgeted Cost = 13400*2 = 26800

    Actual Cost is given = $28400

    So variance = $28400-$26800 = $1600 (unfavorable)

    So option (d) will be the correct option
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “At 13000 direct labor hours, the flexible budget for indirect materials is $26000. If $28400 are incurred at 13400 direct labor hours, the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers