Olivera Corporation's Flexible Budget Performance Report for Last Month Shows

question 224

Multiple Choice

Olivera Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $31,178 and that the spending variance for indirect materials cost was $2,261 unfavorable. During that month, the company worked 11,900 machine-hours. Budgeted activity for the month had been 12,200 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to:

• A)$2.74
• B)$2.81
• C)$2.37
• D)$2.43

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