The Redrock Company Uses Flexible Budgeting for Cost Control

question 30

Multiple Choice

The Redrock Company uses flexible budgeting for cost control.Redrock produced 10,800 units of product during October,incurring indirect material costs of $13,000.Its master budget for the reflected indirect material costs of $180,000 at a production volume of 144,000 units.What was the flexible budget variance for the indirect material costs in October?

• A)$1,100 favorable.
• B)$1,100 unfavorable.
• C)$2,000 favorable.
• D)$2,000 unfavorable.
• E)$500 favorable.

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Definitions:

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