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MULTIPLE CHOICE EXAMPLES CHAPTER 9 34. Mcneeley Footwear Corporation’s flexible budget cost formula for supplies, a variable overhead cost, is $2.94 per unit of output. The company’s flexible budget performance report for last month showed a $4,998 favorable variance for supplies. During that month, 11,900 units were produced. Budgeted activity for the month had been 12,300 units. The actual costs incurred for indirect materials must have been closest to: A) $2.94 B) $2.03 C) $2.10 D) $2.52 Ans: D $2.94/unit * 11,900 actual units = $34,986 (Budgeted Cost) $34,986 - $4,998 favorable variance = $29,988 $29,988 / 11,900 units = $2.52 per unit *Note: the budgeted activity of 12,300 units is only used to calculate budgeted costs per unit. Therefore, it is not pertinent to this problem. Use the following information to answer 105-106 The Chuba Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours (DLHs). During December, the
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