To calculate fixed overhead flexible budget variance, an actual incurred cost is subtracted from ___________?
Correct answer: C. flexible budget amount
- A. variable amount
- B. constant amount
- C. flexible budget amount
- D. production amount
Explanation
Fixed overhead flexible-budget variance compares actual fixed overhead with the fixed overhead allowed in the flexible budget. Therefore, actual incurred cost is subtracted from the flexible budget amount, with the sign indicating favorable or unfavorable performance.
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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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