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vesna_86 [32]
4 years ago
10

At 9,000 direct labor hours, the flexible budget for indirect materials is $27,000. If $28,000 of indirect materials costs are i

ncurred at 9,200 direct labor hours, the flexible budget report should show the following difference for indirect materials:
Business
1 answer:
Lostsunrise [7]4 years ago
7 0

Answer:

<em>$400 not favorable</em>

Explanation:

<em>Flexible budget for indirect materials =$27000</em>

<em> Cost Incurred in direct labour hours= $28,000</em>

<em>Hours of labour= 9,200</em>

<em>DHL= Direct labour hour</em>

<em> The  indirect materials budgeted  per direct labor hour is= $3 ($27,000/9,000). </em>

<em>So the activity level of 9,200 direct labor hours, budgeted indirect materials are $27,600 (9,200 X $3 per DLH).</em>

<em>therefore, the actual indirect materials cost is= $400 ($28,000 - $27,600)  more than estimated. the difference is not favorable </em>

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