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3 Kappa Companys master budget calls for the production of 6,000 units of product monthly. The master budget includes indire
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Answer #1

Solution:

Budgeted indirect labour monthly = $396000/ 12 = $33,000

Budgeted indirect labour per unit = Monthly indirect labour / monthly units = $33000/ 6000 = $5.50 per unit

Flexible budget indirect labour = Actual units * budgeted indirect labour per unit = 5600* $5.50

= $30,800

Flexible budget variance for indirect labour = Flexible budget indirect labour - Actual indirect labour

= $30800 - $30970 = $170 Unfavorable

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