If the flexible budget amount is $21500 and fixed overhead flexible budget variance is $10000, then actual incurred cost will be _________?
Correct answer: B. $31,500
- A. $61,500
- B. $31,500
- C. $41,500
- D. $51,500
Explanation
Assuming the stated $10,000 variance is an unfavorable variance, actual incurred cost equals the flexible-budget amount plus the variance: $21,500 + $10,000 = $31,500. A favorable variance would instead require subtraction, but cost-variance questions normally treat a positive amount here as unfavorable.
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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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