Baxter Corporation’s master budget calls for the production of 5,000 units per month and $144,000indirect labor costs for the year. Baxter considers indirect labor as a component of variable factoryoverhead cost. During April, the company produced 4,500 units and incurred indirect labor costsof $10,100. What amount (rounded to the nearest whole dollar) would be reported in April as aflexible-budget variance for indirect labor? Is this variance favorable (F) or unfavorable (U)?

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Chapter19: Pricing Concepts
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Baxter Corporation’s master budget calls for the production of 5,000 units per month and $144,000
indirect labor costs for the year. Baxter considers indirect labor as a component of variable factory
overhead cost. During April, the company produced 4,500 units and incurred indirect labor costs
of $10,100. What amount (rounded to the nearest whole dollar) would be reported in April as a
flexible-budget variance for indirect labor? Is this variance favorable (F) or unfavorable (U)?

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