If the flexible budget amount is $26000 and fixed overhead flexible budget variance is $12500, then actual incurred cost would be ____________?
Correct answer: A. $38,500
- A. $38,500
- B. $48,500
- C. $58,500
- D. $13,500
Explanation
Actual incurred cost equals the flexible-budget amount plus the fixed-overhead flexible-budget variance: $26,000 + $12,500 = $38,500. The variance is treated as an excess of actual cost over the budgeted amount.
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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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