ECONOMICS

Detailed explanation-1: -At 9, 000 direct labor hours, the flexible budget for indirect materials is $27, 000. If $28, 000 of indirect materials costs are incurred at 9, 200 direct labor hours, the flexible budget report should show the following difference for indirect materials: a. $1, 000 unfavorable.

Detailed explanation-2: -Flexible, rolling budgets empower entrepreneurs to cope with change. This nimble planning process lets you adjust spending throughout the year; benefits include less overspending, more opportunities and speedier responses to changing market and business conditions.

Detailed explanation-3: -The purpose of the flexible budget is to: allow management some latitude in meeting goals. eliminate cyclical fluctuations in production reports by ignoring variable costs. compare actual and budgeted results at virtually any level of production.