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:

$400 not favorable

Explanation:

Flexible budget for indirect materials =$27000

Cost Incurred in direct labour hours= $28,000

Hours of labour= 9,200

DHL= Direct labour hour

The  indirect materials budgeted  per direct labor hour is= $3 ($27,000/9,000).

So the activity level of 9,200 direct labor hours, budgeted indirect materials are $27,600 (9,200 X $3 per DLH).

therefore, the actual indirect materials cost is= $400 ($28,000 - $27,600)  more than estimated. the difference is not favorable

borrow money from the government then pay the government back 5k

since the options are not listed, when you are working on your budget you should also add water, tv, internet, miscellaneous and your 'fun' money for in your budget. when budgeting, you need to allow for fun money, and mis/accidental money so that you stick to the budget and not go crazy because you feel strapped to the budget.