Velten Corporation's Flexible Budget Performance Report for Last Month Shows

Multiple Choice

Velten Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $45,198 and that the spending variance for indirect materials cost was $9,114 favorable. During that month, the company worked 18,600 machine-hours. Budgeted activity for the month had been 19,000 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to:

A) $1.90
B) $2.86
C) $1.94
D) $2.92