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Olivera Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $46,820 and that the spending variance
Olivera Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $46,820 and that the spending variance for indirect materials cost was $2,620 unfavorable. During that month, the company worked 17,000 machine-hours. Budgeted activity for the month had been 17,440 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to:
a. $2.91
b. $2.98
c, $2.53
d. $2.60
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