If an actual cost incurred is $627500, the flexible budget amount is $358750, then fixed overhead variance of flexible-budget will be _________?
Correct answer: D. $268,750Standardized & Admissions Tests
- A. $218,750
- B. $238,750
- C. $258,750
- D. $268,750Standardized & Admissions Tests
Explanation
The flexible-budget variance is the difference between actual cost and the flexible-budget amount: $627,500 − $358,750 = $268,750. Since actual cost is higher, the variance is unfavorable, matching option d.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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