Olivera Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $56,081 and that the spending variance for indirect materials cost was $2,300 unfavorable. During that month, the company worked 19,700 machine-hours. Budgeted activity for the month had been 20,110 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to:

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The answer is analogy approach

Answer(d); /// in the absence of transaction costs,private parties can solve the problem of externalities on their own;