CAF-5 · Chapter 11 · Question 10 of 10
A factory budgeted its fixed production overheads at Rs. 168,000 for the period. The actual fixed overheads incurred were Rs. 170,000. What is the fixed production overhead expenditure variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 2,000 Adverse
Explanation
The fixed production overhead expenditure variance is simply the difference between the budgeted fixed overhead expenditure and the actual fixed overhead expenditure. Rs. 168,000 (Budgeted) – Rs. 170,000 (Actual) = Rs. 2,000 Adverse (because actual spending was higher).
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