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At 18,000 direct labor hours, the flexible budget for indirect materials is $36,000. If $37,400 are incurred at 18,400 direct labor hours, the flexible budget report should show the following difference for indirect materials Question 12 options:

a. $1,400 unfavorable
b. $600 favorable
c. $600 unfavorable
d. $1,400 favorable

Respuesta :

Answer:

difference for indirect materials = $600 unfavorable

correct option is c. $600 unfavorable

Explanation:

given data

direct labor hours = 18,000

indirect materials= $36,000

incurred = $37,400

direct labor hours = 18,400

to find out

difference for indirect materials

solution

we get here difference for indirect materials that is express as

difference for indirect materials = [tex]\frac{indirect\ materials*direct\ labor\ hours}{direct\ labor\ hours}[/tex] - incurred      ......................1

difference for indirect materials = [tex]\frac{36000*18400}{18000}[/tex] - $37400

difference for indirect materials = $36800 - $37400

difference for indirect materials = $600 unfavorable

correct option is c. $600 unfavorable

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