Newsom Footwear Corporation's flexible budget cost formula for supplies,a variable cost,is $2.61 per unit of output.The company's flexible budget performance report for last month showed a $6,840 unfavorable spending variance for supplies.During that month,17,100 units were produced.Budgeted activity for the month had been 16,700 units.The actual cost per unit for indirect materials must have been closest to:

Question

Quizplus · Accepted Answer

X = actual cost per unit for indirect materials
Spending variance = Actual results - Flexible budget
$6,840 = (17,100 F1F1F1S1F1F1F10 X)- (17,100 F1F1F1S1F1F1F10 $2.61)
$6,840 = 17,100X - $44,631
17,100X = $51,471
X = $3.01

Newsom Footwear Corporation's Flexible Budget Cost Formula for Supplies,a Variable