B -static planning budget and actual results O- flexible budget and actual resul

Question

B -static planning budget and actual results O- flexible budget and actual results D - master budget and static planning budget Olivera Corporation's 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: (Ab-sa 31,RS-2261 2% 12,200 2.SF A $2.74 B-$2.81 - $2.37 D - $2.43 Which of the following would produce a materials price variance? A - An excess quantity of materials used. An excess number of direct labor-hours worked in completing a job. C- Shipping materials to the plant by air freight rather than by truck.. n Rreakane of materials in production

Explanation / Answer

Spending variance = (Standard cost-actual cost)

-2261 = (X-31178)

X(standard cost ) = 28917

Cost per machine hour = 28917/11900 = 2.43

so answer is d) $2.43

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