Biggs Enterprise's Flexible Budget Cost Formula for Indirect Materials, a Variable

Multiple Choice

Biggs Enterprise's flexible budget cost formula for indirect materials, a variable cost, is $0.60 per unit of output. If the company's performance report for last month shows a $200 favorable spending variance for indirect materials and if 9,000 units of output were produced last month, then the actual costs incurred for indirect materials for the month must have been:

A) $5,600
B) $5,400
C) $6,000
D) $5,200