Answer the Following Questions Using the Information Below:
Bundaberg Bicycles

question 206

Multiple Choice

Answer the following questions using the information below:
Bundaberg Bicycles has prepared the following flexible budget for September and is in the process of interpreting the variances.F denotes a favourable variance and U denotes an unfavourable variance.
$$\begin{array} { l r r r } & \text { Flexible } & { \text { Variances } } \\& \underline { \text { Budget } } & \underline {\text { Price }} & \underline { \text { Efficiency }} \\\text { Material A } & \$ 20000 & \$ 1000 \mathrm { U } & \$ 1200 \mathrm {~F} \\\text { Material B } & 30000 & 500 \mathrm {~F} & 800 \mathrm { U } \\\text { Material C } & 40000 & 1400 \mathrm { U } & 1000 \mathrm {~F}\end{array}$$
-The actual amount spent for Material B was:

• A)$29 700.
• B)$30 500.
• C)$30 800.
• D)$30 300.

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Definitions:

Factory Overhead

This refers to all the indirect costs of production that are not directly tied to a specific product, including utilities, maintenance, and salaries of non-direct labor employees.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated in advance based on estimated costs and activity levels.

Materials Requisition

The form or electronic transmission used by a manufacturing department to authorize materials issuances from the storeroom.

Materials Ledger

The subsidiary ledger containing the individual accounts for each type of material.