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:

Binocular Disparity

The difference in the images received by the two eyes due to their slightly different perspectives, important for depth perception.

Retina

A light-sensitive layer of tissue at the back of the eye that converts light into neural signals sent to the brain.

Good Continuation

A principle in gestalt psychology that states elements tend to be grouped together if they follow in the same direction or form a continuous pattern.

Texture Gradients

A visual clue to depth and distance, which arises from a gradual change in the appearance of a surface's texture as it recedes into the distance.