Answer: b. $5,400
Explanation:
When there is a FAVOURABLE VARIANCE it means that the ACTUAL amount spent on a project is less than the amount that the company BUDGETED for it.
There is a favourable Variance in the scenario described above meaning that the budgeted costs for Indirect Materials was higher than the actual costs.
That means that the actual costs can simply be calculated by the following formula,
Actual Cost = Budgeted Amount - Positive Variance.
Budgeted Amount = 0.75 * 8,000 units
Budgeted Amount = $6,000
Actual Cost incurred is therefore,
= 6,000 - 600
= $5,400
Hence the correct answer is Option B
